As climate-related events intensify across the Pacific region, the Pacific Catastrophe Risk Insurance Company (PCRIC) is exploring the possibility of introducing a new parametric insurance product for extreme heat, a growing and under-addressed climate risk in the region.

With the support from the Global Shield Solutions Platform (GSSP), managed by the Frankfurt School, PCRIC has engaged leading climate policy expert Mr Daniel Lund to conduct a regional scoping study to assess the potential demand for such an innovative insurance solution. The study will provide strategic insights into the viability and design of an extreme heat parametric product, with findings expected by August 2025.

Mr. Lund has been a key figure in supporting the Pacific region’s response to climate change. As Special Adviser on Climate Change to the Fijian Government since 2018, he played a pivotal role in the development of the Climate Change Act and National Climate Change Policy. He has also contributed to regional financial risk strategies and currently serves as the representative for Small Island Developing States on the board of the Loss and Damage Fund.

PCRIC CEO, Mr. Aholotu Palu, noted:

“This study is essential in helping PCRIC stay ahead of the curve in providing much-needed solutions to respond to the region’s evolving and most pressing challenges. Mr. Lund’s extensive experience in this space makes him an ideal fit for this critical role. We endeavour to offer the most effective climate risk financing products to our member countries.”

Dr. Annette Detken, Head of GSSP, added:

“Extreme heat is an increasingly severe risk for Pacific Island Countries, yet it is not sufficiently addressed by traditional insurance. Supporting PCRIC’s efforts to explore parametric solutions for extreme heat is aligned with the Global Shield’s mission to enable timely and targeted financial protection where it is needed most. We are pleased to support PCRIC in driving innovation in climate risk financing responding to the needs of its member countries.”

The initiative forms part of PCRIC’s wider efforts to diversify its product offerings and ensure that Pacific nations have access to disaster risk financing solutions. With GSSP’s support, this feasibility study also contributes to the Global Shield’s objective of closing the protection gap and increasing the resilience of climate-vulnerable populations.