UPDATE will return the number of modified rows. If you use JDBC (Java), you can then check this value against 0 and, if no rows have been affected, fire INSERT instead. If you use some other programming language, maybe the number of the modified rows still can be obtained, check documentation.
This may not be as elegant but you have much simpler SQL that is more trivial to use from the calling code. Differently, if you write the ten line script in PL/PSQL, you probably should have a unit test of one or another kind just for it alone.