Pacific MMI makes parametric drought payout in Papua New Guinea
A multi-peril parametric insurance scheme in Papua New Guinea has made a payout following a recorded drought event across June and July, the policyholder Women's Micro Bank said on Monday. The payout of 621,000 Papua New Guinea Kina ($104,210) was distributed among 15,295 people across 14 districts.
By Rebecca Delaney Sept 21 (The Insurer) — A multi-peril parametric insurance scheme in Papua New Guinea has made a payout following a recorded drought event across June and July, the policyholder Women's Micro Bank said on Monday. The payout of 621,000 Papua New Guinea Kina ($104,210) was distributed among 15,295 people across 14 districts of the island nation. In June and July, the National Capital District of Papua New Guinea, the incorporated area around its capital Port Moresby, was declared at drought critical status. Six other provinces (East Sepik, Madang, Gulf, Central, Morobe, Milne Bay, Eastern Highlands and West Sepik) were placed on drought alert.
The most significant payouts were recorded in Wewak District in the province of East Sepik, where 2,322 members received a combined 232,000 Kina, while in Madang District, 1,566 policyholders received 156,000 Kina. The policy is underwritten by Pacific MMI Insurance Limited, with reinsurance provided by Pacific Reinsurance Ltd. Cover is held by Mama Bank, the first women's microbank in the Pacific, with the drought and excessive rainfall parametric insurance programme among the first to receive a premium subsidy grant from industry-backed charity Humanity Insured.
The policy was developed through the Pacific Insurance and Climate Adaptation Programme (PICAP), a joint initiative by the UN Capital Development Fund, the UN Development Programme, and the University Institute for Environment and Human Security. PICAP is supported by the Australian government's Department of Foreign Affairs and Trade and the New Zealand Ministry of Foreign Affairs and Trade. "Parametric insurance allows us to pay quickly and transparently, because payouts are driven by independent data rather than lengthy assessments.
Delivering automatic payouts to nearly 16,000 people across 14 districts demonstrates that this model can work at scale in Papua New Guinea, and we are proud to stand behind it," said Darryl Williamson, CEO of Pacific MMI. UNDP resident representative, Nick Booth added: "This payout shows what becomes possible when insurers, reinsurers, distribution partners and communities work together. "