By GEORGINA MICHAEL
Mama Bank has launched the Parametric Insurance Product in collaboration with the Government, United Nations Development Program (UNDP) and insurance partners.
The launching was witnessed by the Minister for Environment, Conservation and Climate Change, Simon Kilepa, Mama Bank CEO Gunanidhi Das, UNDP Resident Representative Nicholas Booth, and representatives of insurance companies and development partners.
The Parametric Insurance Product is a type of insurance that provides payouts based on a pre- agreed trigger event. The payout is triggered when a specific, measureable event occurs such as cyclone, earthquake, drought and heavy rainfall, and is not based on actual loss or damage.
CEO of Mama Bank Gunanidhi Das said: “The Parametric Insurance Product has been implemented in 10 provinces (NCD, Goroka, West Sepik, Morobe, Western, Madang, Buka, East Sepik, Central and Gulf) within PNG with our own customers even before being launched and we are aiming to provide insurance coverage up to 60,000 by 2028.
“The idea of launching came about when we saw that our customers were venerable to natural disasters such as earthquake, rainfall, heavy rainfall route and cyclones and couldn’t repay loans in due time.’’
“And so, when we are giving out loans to our vulnerable communities and when these barrels strike into their livelihood, we are having difficulties in getting back our money, and that’s where the problem is.”
“We tried to come up with a solution, and that’s where UNCDF, UNDP and the other partners like humanity insurance, all those came in to help us to create this product or design this product, to showcase how we can reach out to our own customers, then to the whole country.”
“Mama Bank is supported by development partners such as, Humanity Insured and UNCDF in terms of tailored made insurance solution to provide build up time during natural disasters, Humidity Insured supported with premium subsidy whereas UNCDF is supporting with awareness and outreach of the product through online and offline outreach events.”
“Currently, the premium is K14 flat rate across all products and locations and maximum payout stands on k200 available to all customers regardless of business type or geography,” Mr Das said.
Minister Kilepa said: “PNG like other Pacific Island nations is at the frontline of climate change impacts where 80 to 85 per cent of our population depends on agriculture, fisheries and etc., and these natural disasters devastate this livelihood where women, children and local communities face misappropriate impacts.”
“For too long our rural families and low income communities have carried the burden alone especially on the frontline social and economic disruptions and so building resilience is both a climate and social injustice imperative.”
Mr Kilepa said this product was a game-changer as it would provide for prearranged rapid payouts after disasters and reduce resilience on slow aid or burdensome loans. It will bridge the insurance gap, which will target low income earners and informal workers.”
“This insurance will shift from venerability to resilience through innovation and partnership, together the government, private sector, development partners and communities PNG can thrive without challenges.”
Mr Booth said: “These natural disasters harm the small medium size enterprises that make up the backbone of this country, and Parametric Insurance is a game-changer for those small businesses.”
He added that payoffs would be made within weeks and not months, without having large adjustment claims for victims to rebuild their lives and their businesses.
The Parametric Insurance Product showcased Mama Bank’s role as a risk aggregator that engaged with key stakeholders and its role in women empowerment and financial inclusion.
Mama Bank also engages government, development partners, financial institutions, insurers, and communities to promote dialogue and collaboration on inclusive insurance solutions and raising awareness of parametric insurance as a tool to strengthen resilience of women and MSMEs in PNG.