The Asian Development Bank (ADB), the United Nations Capital Development Fund (UNCDF), and the UN Development Programme (UNDP) are joining forces to establish an insurance market tailored for micro, small, and medium-sized enterprises (MSMEs) in Fiji. These businesses, which play a major role in the country’s economy, face increasing risks from extreme weather events. The initiative is backed by $950,000 in technical assistance from the Asia-Pacific Climate Finance Fund (ACliFF) and will focus on studying the insurance landscape, working with local providers, and piloting insurance products. It builds on the Pacific Insurance and Climate Adaptation Programme (PICAP), which has already introduced parametric insurance to vulnerable communities in the region.
According to ADB’s Pacific Subregional Office Regional Director Aaron Batten, small businesses are vital to Fiji’s economy and workforce, making it crucial to ensure their protection. This initiative will help lay the foundation for a domestic insurance market that addresses their specific needs and enhances resilience across key sectors.
Parametric insurance, at the center of this initiative, pays out based on pre-agreed triggers such as rainfall levels or wind speeds, without requiring proof of actual losses. Its simplicity and quick payouts make it particularly effective in supporting vulnerable communities after climate disasters.
MSMEs represent over 80% of businesses in Fiji and provide employment to more than a quarter of the workforce, yet they remain highly exposed to climate risks. With limited access to appropriate insurance solutions, recovery is often difficult and slow. The initiative aligns with ADB’s Country Partnership Strategy for Fiji (2024–2028), which prioritizes strengthening resilience against economic and climate-related shocks. It also complements PICAP, jointly implemented by UNCDF, UNDP, and the UN University’s Institute for Environment and Human Security, which supports low-income households against natural hazards.
UNCDF Executive Secretary Pradeep Kurukulasuriya emphasized that the approach empowers MSMEs to grow stronger, foster resilience, and drive sustainable development. UNDP Resident Representative for the Pacific Office in Fiji Munkhtuya Altangerel added that the project contributes to risk-informed development, digital innovation, and progress across the Pacific.
The funding comes from ACliFF, a multi-donor trust fund created in 2017 to promote financial risk management tools that unlock capital for climate-related investments and boost resilience. ADB, established in 1966 and owned by 69 members, continues to play a central role in driving inclusive, resilient, and sustainable development in Asia and the Pacific through partnerships and innovative financial solutions.
Related Posts
