MICROFINANCE PAPER WRAP-UP: “Pacific Insurance and Climate Adaptation Programme: Gender Equality and Social Inclusion Strategy,” Published by UNCDF

The authors of this paper note that the accessibility of climate- and disaster-risk financing and insurance instruments is growing globally and especially in the Pacific Island region. This region is particularly susceptible to climate risk because of factors such as “geographic remoteness,” “frail infrastructure” and the fact that 75 percent or more of local populations work in the agricultural sector, with much of the remainder working informal jobs. Cyclones cause the most economic damage across the region, significantly harming subsistence farmers. For example, Tropical Cyclone Winston caused FJD 2 billion (USD 909 million) in damages in Fiji in 2016, an amount equivalent to 20 percent of the country’s GDP. The government of Fiji observes it typically takes five to 10 years for farms to recover from such storms, which hence have long-term effects on economic growth in general.

Women are affected disproportionately by these storms because they often have low levels of education, high rates of gender-based violence perpetrated upon them and high societal expectations regarding domestic work. Additionally, the few formal jobs that women do tend to work in, such as raising small livestock and vegetable cultivation, tend to be more affected by these storms than most other jobs.

Despite 94 percent of women facing severe economic consequences from natural disasters, only 8.6 percent received assistance from government-funded recovery programs. Most women simply relied on personal savings. Although 73 percent were aware of the existence of insurance products, only 20 percent purchased insurance. However, 89 percent responded that they would subscribe to a climate-disaster insurance policy with an annual premium of FJD 100 (USD 45) if it offered coverage of FJD 1,000 (USD 450).

The authors propose a number of ways to create climate- and disaster-risk financing and insurance products oriented toward “gender equality and social inclusion.” One is leveraging mobile money wallets to disseminate insurance policies, as approximately 85 percent of women in Fiji own smartphones and use mobile money services. Another is employing female insurance agents, as the vast majority of women surveyed said they would feel more comfortable learning about and subscribing to insurance products from women rather than men. Additionally, the authors found that leveraging agricultural cooperatives increases the accessibility of insurance products. Other factors in increasing female access to insurance include financial literacy courses, woman-focused marketing and ease of claims.

This is a summary of a paper published by UNCDF, May 2022, 22 pages, available at https://www.uncdf.org/article/7559/pacific-insurance-and-climate-adaptation-programme-gender-equality-and-social-inclusion-strategy.

By Ben Greissman, Research Associate

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