We explored how the private sector, civil society, and Government can collaborate to incorporate climate change considerations into the current data collection methods to support MSME microinsurance for Samoa tailored to their unique needs and risks.
— Samoa —
risk. protection. resilience.
Enhancing climate risk resilience through Microinsurance in Samoa
"Climate risk insurance is not a silver bullet, but it can play a vital role" - Anon
Challenge
Microinsurance is a type of insurance that can provide low-cost coverage to low-income individuals or groups who face various risks, such as natural disasters and climate change impacts. Microinsurance can help MSMEs reduce their vulnerability and increase their resilience by providing financial protection and access to post-disaster liquidity. However, microinsurance is not widely available or accessible in Samoa due to several challenges, such as low awareness, high transaction costs, limited distribution channels, regulatory barriers, and lack of data and risk assessment.
To address these challenges, SBEC proposed to design and implement a microinsurance scheme for MSMEs in Samoa tailored to their needs, preferences, and capacities. The scheme would offer various products covering different risks, such as cyclones, floods, droughts, fires, and business interruption. The scheme would also leverage innovative technologies and partnerships to enhance the microinsurance services' efficiency, affordability, and inclusiveness. For example, the scheme would use mobile phones and digital platforms to facilitate enrollment, premium collection, claims processing, and payouts. The scheme will also partner with local stakeholders such as banks, cooperatives, NGOs, and government agencies to expand the outreach and delivery of microinsurance services.
Strategy
Our international insurance and risk expert developed a feasibility report providing a detailed analysis of Samoa's demand, supply, and enabling environment for microinsurance. Our initial assessment focused on the status quo of MSMEs in Samoa and their exposure to climate risks. We looked at two aspects:
- The availability and quality of existing data on the historical effects of climate-related disasters on economic growth and public finances, especially for MSMEs,
- The current practice and feasibility of integrating disaster data into the regular economic forecasting and modeling tools used by the Government for informed decision-making.