By John Houanihau
The Solomon Islands Meteorological Services (SIMET) has pledged its support for the parametric insurance initiative, emphasizing its readiness to provide data essential for its implementation.
This commitment was highlighted during the SI National Education Workshop: Building Finance Resilience through Parametric Insurance and Disaster Risk Finance, hosted by the United Nations Capital Development Fund (UNCDF) and the Central Bank of Solomon Islands (CBSI) this month.
Speaking at the event, Max Sitai of SIMET affirmed the organization’s readiness to contribute to the initiative by disseminating data and supporting its objectives.
Parametric insurance is a novel solution that provides payouts based on predefined “trigger” events, such as cyclones or excessive rainfall, eliminating the need for lengthy loss assessments. It is part of climate and disaster risk finance and insurance (CDRFI) solutions designed to offer rapid financial responses, minimizing humanitarian and economic losses after disasters.
“SIMET is transitioning to what is called impact-based forecasting, which predicts the expected impacts of specific weather events. This type of information aligns well with the goals of parametric insurance,” Sitai said.
He explained that impact-based forecasting is a new approach being adopted in the Solomon Islands and other Pacific Island countries, providing a critical link between disaster risk reduction and parametric insurance.
Through this methodology, SIMET can utilize climate forecasting on various timescales. “For shorter timescales, we analyze triggers like 72-hour rainfall or wind speeds. On a broader climate scale, we examine early action rainfall outlooks, reviewing up to 12 months of data to inform decisions that could benefit vulnerable populations,” he explained.
The Solomon Islands’ extensive network of synoptic and manned stations collects key weather parameters, including rainfall, temperature, humidity, pressure, wind speed, and direction. This wealth of data is stored in SIMET’s database and is readily available to support parametric insurance programs.
Parametric insurance is also gaining traction in the region, with expansion into Papua New Guinea. A pilot program launched in December 2023 by UNCDF’s Pacific Insurance and Climate Adaptation Programme (PICAP), in collaboration with underwriter Pacific MMI Insurance Limited and Women’s Micro-Bank, highlights the growing importance of such solutions.
