The introduction of the Niucare Life Insurance Policy in Papua New Guinea (PNG) has received a harsh backlash across the country and overseas. While the initiative has merit, prominent leaders, including East Sepik Governor Allan Bird and others, are questioning the timing.
The scheme has clear benefits. However, making it work in the face of the extremely high levels of corruption and mismanagement by past and present governments leaves little room for the public to believe in or trust this government-backed initiative.
The government intended to proceed with limited public awareness and consultations regarding a 2.7% salary deduction from approximately 133,000 public servants under the new scheme, which is managed by the recently established Public Service Niucare Association (PSNA). However, the public pushed back, eventually forcing the government to delay the launch and allow proper consultation.
Insurance Industry in Papua New Guinea
Mordor Intelligence reports that the insurance sector in PNG is characterized by a low penetration rate, currently below 2%, indicating substantial growth potential. The market is projected to grow at a compound annual growth rate (CAGR) of 12% over the next five years, driven by increasing awareness of insurance benefits and new extractive projects that are expected to bolster the economy. Despite these promising figures, challenges remain, including outdated legislation and a lack of alignment with international best practices.
Currently, PNG has four life insurance companies and seven brokers operating within a competitive market. Key players include Capital Life Insurance, Pacific MMI, Aon Risk Services, and Marsh PNG. The life insurance market’s total assets were reported at approximately PGK 1.48 billion (USD 449 million) in 2019, contributing significantly to the national GDP as revealed by Mordor Intelligence.
However, insurance company assets accounted for only 1.32% of GDP as of 2020, underscoring the sector’s underdevelopment relative to its potential according to World Bank data.
Concerns and Criticism
The scheme has received extremely harsh backlash from both public servants and the wider population with local media and social media commentators labeling it as a “total scam” amid fears of corruption within PNG’s governance structures. East Sepik Governor Allan Bird has provided mixed reactions, stating that while the initiative has merit, its timing raises concerns. He emphasized that public servants in PNG cannot afford further salary deductions given the already high taxes they are paying and the rising costs of goods and services affecting everyone.
There are widespread doubts about the scheme’s success in the face of extreme levels of corruption and mismanagement by the governments past and present.
As expected, the Department of Personnel Management Secretary Taies Sansan defended Niucare, stating that it aims to enhance health and employment conditions for public servants. She pointed out that many public servants have suffered preventable deaths due to inadequate healthcare access. That argument has merit. And in that context, the scheme can be seen as a safety net for the public servants. However, critics argue that the policy’s rushed implementation lacks transparency regarding fund management.
Implementation Challenges
Initially set to launch in February 2025, the Niucare scheme has been postponed following widespread backlash from public servants. Sansan confirmed that the National Executive Council (NEC) would reassess the policy due to misinformation on social media and overwhelming negative feedback from civil service employees.
The PSNA has faced scrutiny over its qualifications and legitimacy. Allegations have emerged regarding ties to past insurance failures in PNG, raising concerns about its ability to manage public funds effectively. Public servant unions have called for greater transparency and accountability in PSNA operations, emphasizing the need for a clearer understanding of the policy before any salary deductions are made.
A Call for Reassessment
The future of the Niucare policy remains uncertain as stakeholders urge meaningful dialogue to ensure transparency and genuine benefits for public servants across PNG. The government acknowledges that this initiative is unprecedented since no comprehensive life insurance scheme for public servants has existed since 1975. While Sansan emphasized that Niucare could significantly enhance welfare for public servants, she also recognized that its success depends on proper implementation and community trust.
The Niucare scheme certainly presents an opportunity to redefine welfare for public servants in Papua New Guinea. However, it also serves as a stark reminder that progress must be accompanied by accountability. If not, history may remember this initiative as a billion kina scam designed to exploit PNG’s public servants, benefiting only a select few politicians and their cronies while draining the resources of those who serve the nation.
