Studies are underway by Capital Insurance to research unserved markets in Papua New Guinea (PNG), to explore the possibility of providing low-cost insurance specially-designed for currently uninsured properties in informal settlements and villages.

PNG has one of the lowest insurance penetration rates globally, with estimations of coverage being under 2% of Gross Domestic Product, significantly lower than the rest of the region (*). Barriers preventing greater use of insurance include the issue of affordability and a lack of understanding about insurance, plus constraints on supply factors that include a lack of suitable, accessible insurance products for the low-income segments of the population.

Looking for ways to spread insurance protection over a wider range of the population, Capital Insurance is undertaking this ground breaking research to assess market potential and to see if insurance can be delivered to these market segments in a commercially sustainable way. If launched, these products could have the potential to protect thousands of buildings providing an important safety net that would benefit thousands of people across the country.

Focusing on low income earners, the first product would cover buildings up to a fixed amount, whilst the second product would be targeted at community-based assets and infrastructure such as schools, churches, medical centres and water pumps. Cover for both insurance products would include protection against losses from fire and other perils such as storms or floods.

Part funded by a Pacific Financial Inclusion Programme (PFIP) partnership grant of 213,000 Kina (approximately USD 70,000), the research will shed new insights into an area that has not previously been investigated in depth by the insurance sector. Information is being collected through field visits to a range of locations that include urban informal settlements and larger villages. 

Philip Tolley, Managing Director of Capital Insurance Group, explained, “Capital is seeking ways to assist the thousands of Papua New Guineans who live in settlement housing, but are currently excluded from the formal insurance market by virtue of the nature of construction or location of their dwellings. With the assistance of PFIP we are working with these residents to develop creative solutions that will help this substantial segment of the population in the event of a major calamity”

Research results will be ready in September 2016 and will help identify if and how these insurance ideas may be piloted and potentially rolled out.

Source: (*) Oxford Business Group, “Working to extend insurance to PNG’s general populace”, 2015

Contact information

Esther Bates, tel: +679 322 7505; email:; Website:

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