PARAMETRIC INSURANCE FOR INFORMAL WORKFORCE
RESERVE BANK OF FIJI GOVERNOR ARIFF ALI TALKS WITH IMF, WORLD BANK AND TLTB
Parametric insurance will be introduced for farmers and rural dwellers to cover losses brought about by natural disasters, the Reserve Bank of Fiji said.
RBF governor Ariff Ali said the bank was working with the Ministry of Economy, the World Bank and the International Monetary Fund to enable the initiative. He made the comment last week while presenting the RBF insurance annual report for 2018.
Mr Ali presented the report to the Parliament standing committee on economic affairs.
His comments followed queries from Opposition Member of Parliament Inosi Kuridrani during the tabling of report. Mr Kuridrani questioned Mr Ali about the prospects of formulating a policy for villagers who he claimed had money, but did not know where or how to invest.
“My understanding is that most insurance packages cover the working class, as well as semi and wealthy people.
“Is there any thought about forming insurance for people in rural areas who earn money through common land rents?
“People have money, especially villagers and islanders, but don’t know how to go about investing in insurance for cyclone or flood cover.”
Mr Ali said parametric insurance will cover designated areas affected by category three cyclones.
“I’ve also talked to the chief executive of iTaukei and Land
Trust Board.”
Mr Ali said hotel workers and land owners will also be considered for the proposed insurance policy.
“There’s a large number of the dalo and yaqona farmers who should seriously look at investing in the life endowment policy.” Mr Ali said they are exploring opportunities to introduce agriculture insurance in Fiji.
The ideal scheme would better adapt to climate and disaster risks, he said.
“The insurance industry plays a significant role by supporting economic growth as it recycles premiums back into the economy as investment capital,” he said.
The insurance industry held deposits in the banking system totaling $224.4 million at the end of 2018, which enabled the banks’ ability to provide loans for consumption and investment purposes, Mr Ali said.
The Fiji Care micro insurance bundled product grew in strength when it was extended to include farmers from the dairy, copra and rice sectors with premiums as low as $1 a week.
The product was introduced in 2017 with 11,606 cane farmers, but has since grown to comprise civil servants and even social welfare recipients.
“At the end of 2019, the number further increased to just over 135,000,” Mr Ali said.
In 2018, the life insurance sector’s investment portfolio grew by $121million to $1.2billion, where investment was mostly in government securities, he said.