Call for Applications: Pacific Insurance and Climate Adaptation Programme

The Programme also aims to reduce the gender equity gap and ensure vulnerable social groups have access to suitable disaster risk financing and insurance products. The Programme is launched in December 2020 and has since introduced parametric market based micro insurance products to the market in three Pacific Island Countries – Fiji, Tonga, and Vanuatu.

The Programme aims to support up to 20 new implementing partners across the Pacific countries through a combination of performance-based grant agreements (PBAs) and technical assistance (TA) to de-risk their investments and supplement their project teams with experts who have the know-how in designing and delivering inclusive insurance, especially climate risk transfer solutions in the Pacific markets.

Objectives for Solutions

• Category 1
  • New & innovative CDRFI solutions for individuals, communities, and small businesses, especially micro and meso solutions;
  • Objective
    • PICAP aims to support the identification, development, and pilot testing of CDRFI instruments to improve the financial preparedness and resilience of Pacific individuals, households, communities, small businesses, organizations, and governments against climate change and natural hazards.
    • The Programme is looking for both micro and meso CDRFI solutions.
    • In particular, they would like to see products and services developed for economic sectors with a broad economic base, such as agriculture, fisheries, retail and tourism.
    • They encourage public and private sector partnerships to deliver meso-level solutions, such as agriculture insurance portfolio coverage.
    • The Programme will further support innovative and inclusive digital strategies and solutions to increase the overall access to and usage of CDRFI instruments.
    • In line with the PICAP Gender and Social Inclusion (GESI) strategy, they would prefer solutions that target women-owned businesses, women, youth, and/or Persons with Disabilities (PWD).
• Category 2
  • Improving access to and use of CDRFI solutions with a special focus on gender, persons with disabilities, and social inclusion
  • Objective
    • PICAP aims to increase the access to and adoption of CDRFI products, especially insurance, as a tool to reduce the risk of financial losses for women and PWD; thereby increasing their chance of recovery and participation in the economic processes.
    • The Programme wants to design and test market-based incentives tailored to protect PWD, youth, women, and their businesses from economic losses related to natural disasters.
    • In particular, they would like to support initiatives that improve youth’s, women’s, and PWD’s knowledge and skills to understand CDRFI and meaningfully access and use appropriate and affordable CDRFI tools and instruments. This includes the creation and delivery of financial and insurance literacy materials designed to suit the specific needs of youth, women and PWD that promote the adoption of financial tools to strengthen their financial resilience.
    • Additionally, PICAP would like to support innovations in the distribution models, such as using digital channels and employing women and PWD as distributors to improve the access and usage of innovative and inclusive CDRFI products and services.
    • Applicants are encouraged to include a gender-gap analysis and a gender lens perspective in their suggested initiative.
• Category 3
  • Testing and launching digital solutions using frontier technologies that improve, the design, delivery, and impact of CDRFI solutions; and
  • Objective
    • Between 2021 – 2022, PICAP has deployed pioneering market based parametric micro insurance instruments in three Pacific markets: Fiji, Tonga and Vanuatu targeted at small holder farmers, fishers, market vendors and small businesses. This includes the Pacific first cloud based digital insurance onboarding platform called ion board.
    • The Programme would like to scale existing CDRFI products and expand in newer Pacific markets including Kiribati, Timor – Leste, Samoa, PNG and the Solomon Islands.
    • The Programme is interested in exploring the feasibility of using frontier technologies such as machine learning and artificial intelligence (AI) that can emulate human tasks in loss and damage assessments that have the potential to reduce turnaround time, reduce expensive field assessments and can possibly reduce basis risks, benefiting the insured and the insurer.
    • PICAP is open to a range of possibilities offered by digital and mobile-enabled solutions for climate mitigation, adaptation and resilience. This could be related to any financial related service that will assist in improving the financial preparedness and resilience of Pacific individuals, households, communities, small businesses, organizations, and governments against climate change and natural hazards.

Funding Information

• Budget
  • UNCDF will provide a grant to the selected applicants that are technically compliant in accordance with the Evaluation Criteria, UNCDF contributions would generally range from USD 25,000 to 250,000, and may go up to USD 500,000 for projects that demonstrate strong business case, economic impact and financial sustainability.
• Project Duration
  • Projects are expected to have between 12 to 18month duration from the date of signing the Agreement.

Expected Results

• According to the projects and solutions presented, applicants must include in the proposal a complete list of results, outcome indicators and targets for monitoring the achievement of different results. Specific indicators would be finalized based on the nature of the project and would form part of the Performance-based Agreement to be signed between the selected institution and UNCDF.
• Deliverables would be derived from key project milestones to be agreed upon mutually between UNCDF and the selected applicant in accordance with the identified milestones, outcomes and targets of the KPIs during the due diligence and negotiation phase. For illustration, milestones can include market research conducted, go-to-market strategy finalized, or insurance product design finalized and readied for the pilot launch.

Types of Solutions They Are Looking to Support

• Potential applicants shall demonstrate that they have the capacity, skills and expertise to provide capabilities in developing, testing, launching and expanding innovative and inclusive climate risk finance and insurance solutions to the low to-moderate income segment in the priority countries (Fiji, Tonga, Vanuatu Kiribati, Samoa, Solomon Islands, PNG, Tuvalu and Timor Leste).
• Providers can propose one or more financial solutions that provide financial resilience against losses from natural hazards such as cyclones, droughts, and rain (for example, parametric insurance) and other natural hazards that affect the Pacific countries
• The solutions should address the needs of low-income, micro to meso segments and must demonstrate how they cater to the needs of women and PWDs.
• Solutions that cover priority sectors, i.e., clients in agriculture, MSMEs, fisheries, retail, and tourism, will be preferred.
• Solutions that adopt innovative approaches, such as frontier and digital technologies, are particularly encouraged to apply.
• Both new products and improvements to existing products are welcomed as long as they help to expand the adoption among the target groups through improved use cases, customer value and experience. For new solutions, they expect that a minimum viable product is available.

Geographical Scope

• Nationwide, with a focus on under-served segments in the low- to-moderate income bracket in Fiji, Tonga, Vanuatu Kiribati, Samoa, Solomon Islands, PNG, Tuvalu and Timor Leste (separately or all).

Target Segment

• Smallholder farmers, fishers, retailers, women, PWD, micro and small enterprises, and other vulnerable segments in low-and moderate-income groups.

Eligibility Requirements

• Entity registration
  • The applicant (the lead applicant) must be a registered entity such as a licensed financial institution, insurance company, money transfer operator, payment service provider, agent aggregator, mobile network operator, technology provider, Insure tech company, Fintech company, cooperative, credit union, research agency, educational institution, and NGO/civil society organization.
  • For national and regional level solutions, service providers are encouraged to partner with relevant public sector agencies, e.g., national development banks and line ministries.
• Relevant operation licenses (when applicable)
  • The lead applicant must be licensed to provide insurance, insure tech/fin tech, microfinance, remittance services/saving solutions, loans, and digital services. Where the applicant is not a financial service provider, a relevant business or equivalent license from a statutory authority is to be furnished.
• Country of operation
  • The applicant must have operations in the Pacific region, specifically having a minimum of two years of operation in Fiji, Tonga, Vanuatu Kiribati, Samoa, Solomon Islands, PNG, Tuvalu and Timor Leste.
• Consortiums (when applicable)
  • As this is a revolving RFA, multiple applications are allowed, whether independently or in a consortium.
  • Joint applications between market players in the target country or countries are encouraged if the solution proposed will expand delivery networks and promote rural and/or other last-mile access to developing, piloting, launching, and expanding innovative and inclusive insurance products and services to the low-to-moderate income segment in Fiji, Tonga, Vanuatu Kiribati, Samoa, Solomon Islands, PNG, Tuvalu and/or Timor Leste
  • Applications from consortiums of organizations must show proof of partnership prior to this call for applications.
  • The lead applicant and their financial service provider partner must be registered entities with at least three years of operations and must have statutory accounts and audited financial statements for at least one operating year.
• Project funding
  • Applicants must contribute at least 30 percent of the total project cost, which may include technical infrastructure, human and business resources, and operations. At least 15% should include cash contribution.

For more information, visit United Nations Capital Development Fund.