To better understand the challenges, gaps and opportunities around climate risk insurance, a literature review was conducted for identified focus countries in the Pacific. These reports examine and present the current knowledge and substantive findings on economic impacts of natural hazards on vulnerable populations in Fiji, Tonga and Vanuatu.

The reports provide a body of evidence that highlights the disaster and climate related hazards, exposures and vulnerabilities that the programme can effectively target. Evidence that the Pacific Financial Inclusion Programme will use as a starting point to improve coping mechanisms; focusing on financial preparedness and resilience of the vulnerable people and industries in the Pacific.

UNCDF is implementing the Pacific Insurance and Climate Adaptation Programme jointly with the UNDP and UNU-EHS. The overall objective is to improve the financial preparedness and resilience of Pacific Islanders, specifically vulnerable segments of society and economic sectors, towards climate change and natural hazards.

Fiji, Tonga and Vanuatu are highly exposed to natural hazards, with cyclones regularly damaging property and causing long-term cumulative economic harm. They are also exposed to earthquakes, tsunamis, ooding of low-lying areas, and droughts. Climate change is expected to exacerbate weather-related hazards.

Agriculture is the dominant economic activity, carried out mostly on a subsistence basis, and is particularly vulnerable to cyclone damage, severely affecting the poorest and most vulnerable in the population. Climate change is expected to adversely affect agriculture and sheries through increased frequency of extreme weather, sea level rise, and disruption of aquatic ecosystems. Other industries are often small-scale and dependent on natural resources and ecosystems which are also vulnerable to natural hazards and climate change.

Natural hazards disproportionately affect poor people, workers in the informal economy, women, and youths. Poor people tend to be more exposed to hazards than wealthier people, are more severely affected by hazards that do occur, and have fewer resources available to them to cope when disasters do occur. Women and girls are disadvantaged and constrained economically, have livelihoods that are more often dependent on natural resources, and suffer increased incidences of gender-based violence during crises. Youths suffer from disruption to education and employment caused by natural hazards, which can lead to long term develop human capital and permanently reduced employment prospects and incomes.

Support systems that can help poor and disadvantaged populations cope with the impacts of natural hazards include:

• Social protection systems that can rapidly adapt
• Remittances
• Financial inclusion
• Insurance
• Migration
• Community-based support

Economic Impact of Natural Hazards on Vulnerable Populations

UNCDF is implementing the Pacific Insurance and Climate Adaptation Programme jointly with the UNDP and UNU-EHS. The overall objective is to improve the financial preparedness and resilience of Pacific Islanders, specifically vulnerable segments of society and economic sectors, towards climate change and natural hazards.