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Lloyd's and the UNCDF to run parametric insurance training in climate vulnerable countries

Lloyd's and the UNCDF to run parametric insurance training in climate vulnerable countries
03-04-24 / Staff Writer

Lloyd's and the UNCDF to run parametric insurance training in climate vulnerable countries

Johannesburg - Lloyd's, the world's leading marketplace for insurance and reinsurance, has progressed a partnership with the United Nations Capital Development Fund (UNCDF) and the Sustainable Markets Initiative's Insurance Task Force with the delivery of two training workshops in Papua New Guinea and in Fiji.

Aligned with Lloyd's and the UNCDF's collective objective to scale insurance access for climate-vulnerable countries, the workshops are being run to support the local development and understanding of parametric insurance for regional insurers, reinsurers, and central banks in Pacific Island countries.

This work follows on from the Memorandum of Understanding (MOU) signed by the parties in September 2023, which aims to build the technical capacities of insurance providers in Least Developed Countries (LDCs), Small Island Developing States (SIDS) and climate vulnerable countries.

When adopted as part of a diverse insurance offering, parametric policies can support disaster risk reduction and be used to bolster regional and country specific climate adaptation models as well as national Disaster Risk Facility (DRF) strategies.

Initially focussing on building and scaling solutions across Fiji and the Pacific Islands, the partnership will also seek to replicate the model in other regions, including Asia and parts of Africa.

Rebekah Clement, Corporate Affairs Director, Lloyd's said: "We are delighted to be able to progress our Memorandum of Understanding with the UNCDF through our workshops in both Papua New Guinea and Fiji. Parametric insurance can play a vital role to support sovereign states with the financial impact of climate disasters, unlocking funds at speed and redirecting them into resilience strategies."

Dirk Wagener, Resident Coordinator for the UN in Fiji, Tonga, Solomon Islands, Tonga, Tuvalu, and Vanuatu said: "Fiji is a global success story when it comes to parametric insurance and the country has made steady strides since the first product that provided cover against tropical cyclones was launched for smallholder farmers, fishers, and market vendors in 2021. 

"Convening the workshop in Fiji and PNG will set the tone for two-days of learning, robust discussion, peer-to-peer exchanges, knowledge sharing and network building that will strengthen the efforts to build climate resilience in the region. Some key topics to be covered include introduction to in-country risks and their insurability, weather and crop yield index insurance, pricing, distribution, operations, and policy."

Governor Ariff Ali, Reserve Bank of Fiji, said: "The training workshops serves to build capacity within the local industry that will undoubtedly improve service delivery and foster greater access to parametric products.  It will greatly enhance the understanding and knowledge of parametric insurance for climate-vulnerable countries in the Pacific, as a viable option to pursue especially with the excellent track record of communities getting quick payouts."

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