Supporting local communities and small private sector entities to build resilience against extreme weather events is at the core of a new insurance product to be launched next month in Samoa. 

United Nations Capital Development Fund (UNCDF) hosted in Samoa by the United Nations Development Programme (UNDP), Samoa Surety Insurance (SSI) and the Pacific Climate Change Centre (PCCC), are in collaboration to bolster climate resilience in the Pacific Islands region, discussing ways they can unite to promote innovative insurance response mechanisms. 

Samoa Surety Insurance has introduced Samoa's first parametric micro-climate insurance product and anticipatory action designed to cushion and support communities to prepare beforehand for the impact of climate-induced disasters. 

This innovative insurance product will offer rapid financial assistance to vulnerable communities in Samoa, helping them to mitigate the financial strain of extreme weather events. It covers various climate-related risks, including cyclones, floods, droughts, and other environmental disruptions. 

Unlike traditional insurance, which typically assesses damage after an event occurs, this parametric insurance makes payouts based on predefined climate indicators such as wind speed or rainfall thresholds, ensuring that the support arrives quickly when it is most needed. 

The PCCC is discussing how to collaborate with Samoa Surety Insurance to promote and share knowledge with communities in Samoa on the micro-climate insurance product. This product offers swift financial assistance to individuals and small businesses, enhancing their ability to recover and prepare for cyclones, droughts, prolonged rainfall and floods. 

It also contributes to Samoa’s Financial Inclusion Strategy by the Central Bank of Samoa. Parametric insurance differs from traditional insurance by providing payouts based on predefined parameters, such as the intensity of a cyclone or the amount of rainfall, rather than on assessed losses. 

This approach ensures quicker disbursements, enabling communities to address immediate needs following a disaster. An anticipatory action scheme triggers payments before damage occurs based on early warnings, such as wind speed, and weather forecasts. The PCCC, established through a partnership between the Governments of Japan and Samoa, serves as a regional hub for climate change information, research, and innovation. 

It focuses on capacity development in areas such as science to services, knowledge brokerage, capacity building and innovation. In December 2024, the PCCC hosted a Pacific Climate Innovative Solutions Exhibition to showcase selected solutions that can be replicable, affordable, scalable and suitable for the region to enhance climate resilience, and the UNCDF and SSI initiative is one of the selected climate financing mechanisms. This insurance product will be launched in Samoa on 14 March 2025.