Tower today announced the launch of its Cyclone Response Cover pilot ahead of the upcoming cyclone season, which provides a rapid cash pay-out to customers affected by a high wind speed cyclone event regardless of the damage and without the need for an insurance assessment.
For the pilot that is being trialled with families in Ketei Village on Totoya Island in Lau and Kavala Village in Kadavu for the 2022/2023 cyclone season, they choose from three product options, ranging from $1000 to $3000, based on the amount of cover they feel they need to fast-track their recovery after a cyclone event.
Tower’s Head of Pacific Digital Distribution, Veilawa Rereiwasaliwa says the Cyclone Response Cover will benefit the people of Fiji, particularly as climate change impacts increase over time, offering peace of mind and financial security to Fijian communities.
“Fiji is rated as a high-risk area for exposure to natural disasters and is number 15 on the Natural Hazards list in the 2017 World Risk Index report, but less than 10% of families have insurance,” Mr. Rereiwasaliwa said.
“It’s important for us to provide the best possible support to the communities we serve. Cyclone Response Cover gives Fijians an affordable insurance option, as well as peace of mind.”
“You are guaranteed to be paid out if a Cyclone meets certain criteria in your area, no questions asked, and no insurance assessment needed. We aim to process payments within seven days.”
Fiji is heavily exposed to weather events, including cyclones. At times, locals are left to rely on their savings, borrow money or seek cash elsewhere to start their recovery, or even feed their families during a cyclone crisis.
In 2020, Tropical Cyclone Yasa caused approximately F$500m in damage, impacting 97,000 people. In 2016, Tropical Cyclone Winston caused more than F$2b in damage, impacting 350,000 people. “Cyclone Response Cover will lessen the burden on local villages and their support networks, enabling them to recover from cyclone damage quickly. Tower is so proud to be launching this product. We’re doing what’s right by our customers and communities.”
Tower is also working with local financial institutions to expand the initial pilot. Following the pilot phase, Cyclone Response Cover will be available to all people of Fiji for the 2023/2024 cyclone season.
Tower’s Cyclone Response Pilot was launched in collaboration with the United Nations Capital Development Fund (UNCDF). UNCDF Programme Manager for the UN’s Pacific Insurance and Climate Adaptation Programme Krishnan Narasimhan says the UNCDF aims to protect Pacific communities.
“UNCDF, through its flagship Pacific Insurance and Climate Adaptation Programme, is extremely happy to partner with Tower Insurance and provide support in rolling out parametric microinsurance products in Fiji. This partnership is firmly grounded on a common objective of improving the financial resilience and preparedness of Pacific islanders against the impacts of climate change and natural hazards. After an initial pilot and testing in Fiji, the plan is to expand to Tonga, Vanuatu and other Pacific countries.”
How much does it cost?
Policy price is based on the level of cover and the customer’s location:
Western & Northern Fiji, which are more exposed to cyclones – policy costs $95-285
Central & Eastern Fiji which are less exposed – policy costs $75-225
How payment is assessed?
A stepped payout matrix is applied based on wind speed and the
proximity of the customer’s insured location to the cyclone.
For example, if the customer has $3,000 cover and a Category 2 cyclone hits within 25km of their home or property, we’ll pay out 20% of their $3,000 cover amount.
What are the benefits?
- It’s flexible. There are three options of cover for you to choose from.
- It’s affordable. The annual policy price for our basic level of cover works out at just $2 a week*.
- It’s fast. Once we are alerted to the cyclone and assess the customer’s payment, we aim to pay out within 7 days – to their bank account or mobile wallet.
