[Photo: File]

Gaps in weather monitoring, particularly across remote and maritime areas, could affect whether people receive payouts under parametric insurance.

Minister for Public Works, Meteorological Services and Transport Ro Filipe Tuisawau says the existing weather data network provides a reliable foundation for parametric insurance, but coverage needs to be strengthened.

He adds a denser network of weather stations would provide more localized information and reduce the risk of differences between actual damage and the weather measurements
used to trigger insurance payouts.

Ro Filipe says this is particularly important for rainfall monitoring, where technical faults or communication problems during severe weather can affect the data recorded.

“The monitoring and checking of tropical cyclones, including their location, track and wind characteristics, is supported by FMS observations together with satellite radar and other met information. This provides a strong basis for insurance products that use predetermined cyclone-related parameters as payout triggers.”

He says this can create what is known as basis risk, where a policyholder suffers significant damage but the weather data does not reach the required threshold to trigger a payout.

The Minister adds that the coverage is relatively good across Viti Levu, particularly around major population, commercial and agricultural centres, but more weather stations are needed in remote and maritime areas.

He says the expansion of automated weather stations will improve coverage and help parametric insurance products operate more effectively in these areas.

Ro Filipe says the system also has independent verification, with Fiji Meteorological Services providing weather data while Weather Risk Management Services in India independently monitors the insurance index.