The Asian Development Bank (ADB), the United Nations Capital Development Fund (UNCDF), and the UN Development Programme (UNDP) will help create an insurance market for micro, small, and medium-sized enterprises (MSMEs) in Fiji that are increasingly threatened by climate change and the extreme weather it produces.
Fiji is an archipelago of more than 330 islands including two main islands in the Pacific Ocean. Its very existence is threatened by storms and seawater rise brought about by climate change. This initiative will research the insurance landscape for small businesses in Fiji, and work with local insurance providers to develop and test pilot products.
MSMEs account for more than 80% of Fijian businesses and employ more than a quarter of the workforce, according to the Fiji Bureau of Statistics. But the sector remains highly vulnerable to extreme weather, with limited access to tailored insurance solutions that can support recovery and build resilience.
Parametric insurance is a form of index-based insurance that pays out when pre-agreed trigger conditions are met, such as rainfall thresholds or wind speeds. With simple rules and pre-approval—there’s no need to prove actual losses—parametric insurance can help insulate vulnerable communities from climate hazards by providing fast, pre-defined payouts.
“With small businesses making up such a significant proportion of the Fijian economy and workforce, it is essential to protect this sector,” said ADB’s Pacific Subregional Office Regional Director Aaron Batten. “This initiative will help lay the foundation for a domestic insurance market specifically designed to meet the needs of these businesses and support climate resilience across critical sectors of the Fijian economy.”
The initiative builds on the work of the Pacific Insurance and Climate Adaptation Programme (PICAP), which provides parametric insurance to vulnerable communities in the Pacific and is supported by $950,000 in technical assistance from the Asia-Pacific Climate Finance Fund (ACliFF).
“This innovative approach empowers MSMEs in the world’s toughest economies to flourish, strengthen resilience, and foster sustainable development that uplifts communities and leaves no one behind,” said UNCDF Executive Secretary Pradeep Kurukulasuriya.
