Lloyd’s to enter Fiji | New climate-related insurance product design
25 September, 2023, 6:45 pm
Fiji will be on the frontline of a new climate-related insurance product designed to help Small Islands Developing States (SIDS) and Least Developing Countries (LDCs) mitigate climate-related financial risks.
In a statement this week, Lloyd’s, the world’s leading marketplace for insurance and reinsurance, announced a partnership with the United Nations Capital Development Fund (UNCDF) to scale insurance access for climate-vulnerable countries.
“By signing of a memorandum of understanding (MOU), the partnership will involve all parties collaborating to design innovative insurance products that will deliver financial resilience against climate shocks in SIDS and LDCs. Initially focusing 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,” Lloyd announced, on behalf of the Sustainable Markets Initiative’s Insurance Task Force, chaired by Lloyd’s chairman John Neal.
“Insurance has a vital role to play in building resilience against climate-related risks. This partnership with the UNCDF underpins the Sustainable Markets Initiative’s mission to develop a coordinated global effort to mitigate climate and natural catastrophe risks as we progress towards a more sustainable future,” Mr Neal said.
As chair of the Insurance Task Force, Lloyd’s will collaborate with the UNCDF to identify and address potential policymaking challenges hindering the development of climate risk insurance in developing markets, as well as promoting best practice initiatives for SID and LDC policymakers to best mitigate climate catastrophe risks.
The UNCDF and Lloyd’s will also promote Public-Private Partnerships in these regions, with the aim of closing the protection gap, and ensuring the knowledge gained from these actives is shared with key national, regional, and international stakeholders, including policymaking think-tanks, United Nations agencies, and academic research institutions.
“Insurance can serve as a powerful tool, not only in support of climate resilience, but also to secure the delivery of the Sustainable Development Agenda in the world’s most vulnerable countries. To deliver on this promise, we will need innovation and collaboration. The SMI as well as the partnership we are entering into today deeply reflects both of these elements,” said Mourad Wahba, officer-in-charge of the UNCDF.
The partnership signifies a joint ambition to advance and expand access to insurance products between Fiji and the rest of the Pacific (through so-called South-South), and between wider Northern and Southern Hemisphere countries, under the UNCDF Global Shield Coordination hub’s ‘North-South’.
This ambition follows on from the successful launch by the Sustainable Markets Initiative Insurance Task Force of the Disaster Resilience Framework for Climate-Vulnerable Countries by the Sustainable Markets Initiative Insurance Task Force at COP26.