At COP30 in Belém, Pacific leaders issued a united and resounding call for faster, fairer, and more predictable climate and disaster risk finance to protect their communities and economies from escalating climate impacts. 

As articulated by Fiji’s Minister for Environment and Climate Change, Mosese Bulitavu, this call is rooted in the principles of climate justice. Spread across an ocean area of more than 30 million square kilometres, the Pacific is often described as ground zero for climate change. 

Parametric insurance provides one such pathway for Pacific communities to access to rapid financing, protecting assets, accelerating recovery, and strengthening economic resilience and stability. 

Climate disasters are striking the region with increasing frequency and severity, challenging national budgets, and leaving vulnerable communities exposed to lasting social and economic harm. 

Pacific Small Islands Developing States (PSIDS) face annual average losses of US$1.1 billion from natural disasters (page 6). 

An estimated 26.6 million people have been affected by natural disasters in the region over the last 50 years, a number that is projected to progressively increase in the coming years. Without significant adaptation measures, the costs of natural disasters could reach 12.7 percent of the Pacific’s annual GDP by 2100 without sufficient adaptation measures. 

Pacific people are resilient; but their resilience is tested far too often by climate events. They require fit-for-purpose and responsive financing tools to aid them in this fight.  

At present, disaster recovery across the Pacific remains largely reactive and ad hoc, with support mobilized only after the devastation has occurred, and damage assessments are completed. 

Yet resilience is not built in the aftermath of a cyclone. It is built long before the winds and rains arrive. It is built through investments in preparedness, mitigation, and adaptation. 

Proactive and timely financial aid can be a powerful enabler of resilience. 

In the Pacific, there is an evidential need and demand for financial solutions that strengthen disaster preparedness and limit the losses in the community through pre-arranged financing. 

In 2021, a partnership of three UN agencies through the Pacific Insurance and Climate Adaptation Programme, together with the private sector and the Government, introduced parametric insurance solutions in Fiji.  

This was a watershed moment for disaster risk finance in the region. Parametric insurance payouts in 2023 and 2025 demonstrated how quickly funds could reach affected communities, enabling recovery within days rather than months. 

For the first time, Fijian farmers, fishers, and market vendors who had signed up for the product knew with certainty that financial support would be forthcoming if a 'trigger' event— such as windspeed or rainfall thresholds — was reached. 

This certainty brought peace of mind to households who had previously relied on unpredictable aid or informal borrowing.  

When a farmer understands that by paying a small premium, they are guaranteed a payout on a specific date, through an agreed channel, and based on clear conditions, they are far better equipped to prepare for and recover quickly from disasters.  

Parametric insurance has since been launched in Papua New Guinea, Samoa, Solomon Islands, Vanuatu, Tonga and Kiribati to protect against specific and unique climate hazards   

Leading the Shift to Anticipatory Action 

The Pacific can lead a shift from reactive aid to anticipatory, stress-tested systems, with pre-agreed triggers, financing, and responsibilities. This is already being deployed through various pieces of multilateral support to Pacific Island Countries, one such example being PICAP. 

Parametric insurance products are highly adaptable, customizable, and data driven. Because payouts are triggered by measurable events, the scope of protection is wide and limited only by the availability and quality of reliable data 

In Fiji, coverage is currently available for tropical cyclones and excess rainfall. In PNG, products have been developed to cover drought and earthquakes in addition to cyclones and excess rainfall. 

Meanwhile, in Samoa, a hybrid model combines parametric and indemnity insurance to protect against cyclones, earthquakes, excess rainfall, and droughts, while also providing coverage for funeral expenses, term life, personal accidents, house fires, and hospital stays. 

Through a partnership with the UN Office of Disaster Risk Reduction (UNDRR), parametric insurance has also been linked to anticipatory action and offered in Fiji and Samoa as an early response cyclone cover.  

For a premium of either US$2,500 or US$5,000, communities can access an insurance payout of up to US$25,000 or US$50,000 respectively in Fiji. A portion of the total payout is disbursed before a cyclone makes landfall to strengthen preparedness and response in a pre-emptive manner.  

This is a meso-level insurance policy held by a cooperative or agri-agency, whose task is to ensure effective coordination of preparedness activities with their members. The approach minimizes bureaucratic delays by reducing delivery channels and documentation. 

With financial risk transferred to the private sector, families and cooperatives can focus on protecting livelihoods and strengthening their resilience, rather than waiting for post-disaster assistance. 

PICAP exemplifies the need for well-designed, anticipatory systems that strengthen financial resilience across the value chain. Given the region’s vulnerability to cyclones, floods, and droughts, these solutions are crucial for building and improving preparedness and resilience. 

From Pilot to Policy: Scaling Regional Impact 

PICAP’s journey from pilot projects to regional expansion across multiple Pacific Island Countries shows how multilateral programs can scale anticipatory action through policy, regulation, and digital ecosystems. 

Its integration into national disaster risk financing strategies also reflects growing institutional buy-in. 

The strong emphasis on gender-responsive and socially inclusive approaches throughout the value chain of the product supports uptake. Women, persons with disabilities, and micro, small and medium enterprises (MSMEs) are at the heart of its design. 

Through these initiatives, the Pacific is demonstrating that innovation in disaster risk financing does not have to come from the outside. The success of PICAP lies in its Pacific-led, co-designed approach, grounded in local knowledge, regional collaboration, and strong partnerships with the private sector and regulators. 

This approach directly supports the principles of the Sendai Framework for Disaster Risk Reduction (2015–2030), which calls for a shift from managing disasters to managing risk, through anticipatory action, early warning systems, and inclusive financing mechanisms. 

As Pacific nations continue to confront intensifying climate risks, the pathway forward is clear. With anticipatory systems, inclusive design, and regional leadership, the Pacific can redefine what preparedness looks like, turn uncertainty into readiness, and vulnerability into resilience. 

For more information, please contact: 

Sheldon Chanel, Communications Officer | UNDP Pacific Office in Fiji | (E) Sheldon.chanel@undp.org