Papua New Guinea’s multi-peril parametric climate insurance scheme has made its second automatic payout, distributing a total of PGK 621,220 to 15,295 people across 14 districts affected by drought between June and July.

The payouts were triggered when rainfall levels in the affected districts fell below pre-agreed thresholds. Because the insurance is parametric, members did not need to make individual claims or undergo on-the-ground loss assessments.

The drought affected communities in East Sepik, Madang, Gulf, Central, Morobe, Milne Bay, Eastern Highlands and West Sepik provinces.

The largest payouts were recorded in Wewak District, where 2,322 members received a combined PGK 232,200, followed by Madang District, where 1,566 members received PGK 156,600.

The insurance cover is held by Women’s Micro Bank Limited, also known as Mama Bank, on behalf of its members. It is subsidised by Humanity Insured, underwritten by Pacific MMI Insurance and reinsured by Pacific Reinsurance Company.

The scheme was developed with support from the Pacific Insurance and Climate Adaptation Programme (PICAP), a joint initiative involving UNCDF, UN University Institute for Environment and Human Security and UNDP, with support from the Governments of Australia and New Zealand.

Mama Bank CEO Gunanidhi Das says the automatic payout provides timely support to members who are vulnerable to climate-related shocks.

Pacific MMI CEO Darryl Williamson says parametric insurance allows payouts to be made quickly and transparently because they are based on independent rainfall data rather than lengthy loss assessments.

UNDP Resident Representative Nicholas Booth says the latest payout demonstrates how partnerships between insurers, reinsurers, financial institutions and communities can help provide faster financial support when climate shocks occur.