The UN Capital Development Fund assists developing countries in the development of their economies by supplementing existing sources of capital assistance by means of grants, loans and guarantees, first and foremost for the least developed among the developing countries. As a Flagship Catalytic Blended Financing platform of the UN, UNCDF utilizes its unique capability to crowd-in finance for the scaling of development impact where the needs are greatest—a capability rooted in UNCDF’s unique investment mandate—to support the achievement of the 2030 Agenda for Sustainable Development and the realization of the Doha Programme of Action for the least developed countries, 2022–2031. The ‘Pacific Insurance and Climate Adaptation Programme is a multi-year Programme that is jointly implemented by UN Capital Development Fund (UNCDF), UN Development Programme (UNDP) and UN University- Institute for Environment and Human Security (UNU-EHS).  

PNG is ranked as the 9th with the highest disaster risk rating globally as of 2021 and currently there are no risk transfer instruments, such as parametric insurance, available in PNG against climate change. Between 2011-2020, PNG had experienced 26 major disasters and the total average annual economic losses due to disasters was 295 million USD. However, insurance covers less than 5% of disaster losses as against 50% in high income countries. The lack of sufficient resource allocation for adult financial literacy and education among schools and colleges impedes progress in this area, thus leading to low insurance awareness. 

Despite progress in financial inclusion, a significant portion of Papua New Guinea’s workforce remains unbanked and excluded from traditional superannuation schemes and insurance products. Current systems are not equipped to deliver voluntary benefits to the 85% of workers in the informal sector. To address this gap, a consortium of regulated partners, including superannuation funds, banks, digital payment platforms, and insurers, under the oversight of the Bank of Papua New Guinea (BPNG), will collaborate to build and pilot-test an integrated micro pension and parametric insurance solution.

Parametric insurance, which provides automatic payouts based on the occurrence of predefined events (such as tropical cyclones, heavy rainfall, floods, droughts etc.), offers an innovative and effective means to protect informal sector workers from unforeseen financial shocks. By combining micro pensions with parametric insurance, PICAP, with its partners, aims to create a holistic financial safety net that not only secures long-term savings but also provides immediate support in times of crisis.

Against this backdrop, the UNCDF-PFIP commissioned a supply and demand-side study in 2018-19 to assess the feasibility of extending voluntary superannuation and insurance coverage to informal workers, women micro-entrepreneurs, MSMEs and remote rural communities in PNG. This assessment was conducted in consultation with BPNG and Nasfund. The study findings and recommendations were presented at a national stakeholder roundtable hosted by UNCDF, Nasfund.

Following this, UNCDF is looking to support BPNG implement the key recommendations from the feasibility study to increase access to formal digital micro pension and insurance services to economically active citizens of PNG who presently lack access to any form of social security. 

To achieve the above objective, UNCDF will engage a reputable firm/organisation to design a secure and user-friendly digital marketplace architecture for providing universal access to an integrated micro-pension, parametric insurance and emergency savings product solution and voluntary coverage expansion strategy tailored to the needs of informal sector workers in PNG. This digital marketplace architecture would be piloted in one province under a BPNG Regulatory Sandbox and scaled across PNG to enable both informal and formal sector workers and other citizens to meaningfully save for their old age, improve financial resilience and preparedness against natural hazards and protect themselves against a range of insurable risks.

Through this RFP, UNCDF aims to engage a reputed agency based in the Pacific. Presence or experience in PNG shall be of great value, but its not mandatory, to prioritize the development and implementation of appropriate and contextualized financial literacy programs to ensure the successful roll-out and adoption of the digital micro-pension and parametric insurance platform. 

The selected firm/company/organization should have requisite field experience in providing financial products and services and/or financial literacy trainings especially to self-employed women and remote rural communities. The selected agency will be expected to support the digital micro-pension and insurance inclusion initiative through development of tailored curriculum and content around importance of savings and insurance, following this an effective field promotions and communications campaign in the pilot province using field-tested financial and digital literacy tools and interventions. In this process, the entity will be expected to design both physical and digital financial literacy tools and an effective communications strategy for in-person and digital delivery of information and knowledge to both client-facing field staff and target beneficiaries. The communication tools should help target subscribers to easily understand important financial concepts, the features/ benefits and rules of the integrated micro-pension and insurance product solution, and the digital platform user interface for account activation, digital transfer of contributions, and access to services and information. Ultimately, the agency will be expected to encourage and facilitate mass-scale voluntary enrolments and sustained retirement saving and insurance premium contributions by vulnerable segments in the pilot province.