The damage wrought by climate change has spurred countries and communities across the developing world to look at using so-called 'parametric' insurance to help cushion the financial blow.
Guaranteeing a set payout once a specific event occurs, the cover is seen as a way to build resilience among impacted communities, yet the long-term viability of projects is often dependent on government efforts to adapt to worsening weather.
Below are a selection of projects launched in recent years which have already paid out.
Country: FIJI
Year launched: 2022
Project leader: U.N. (UNCDF, UNDP, UNU-EHS)
Insurer: Fiji Care Insurance Limited and Sun Insurance
Reinsurer: SCOR
Supported by: Governments of New Zealand, Australia, India, and Luxembourg
Perils insured: Cyclones - heavy wind and rainfall
Reach: 2,147 people
Payouts: In January and February 2023, the program paid out $110,000 FJD ($50,000 USD) to 559 smallholder farmers, fishermen, market vendors
Country: COLOMBIA
Year launched: 2018
Project leader: Blue Marble and Nespresso
Insurer: Seguros Bolivar
Reinsurer: Zurich Re, Trans Re, Aspen and ASSA
Supported by: The Government of Colombia
Perils insured: Excess rainfall and drought
Reach: 8,000 farmer households
Payouts: In 2022, the program paid out $3 million USD to 6,475 smallholder coffee farmers.
Country: ZIMBABWE
Year launched: 2016
Project leader: Blue Marble and World Food Programme, and agribusinesses
Insurer: Old Mutual in Zimbabwe
Reinsurer: Blue Marble owner companies
Supported by: World Food Programme and agribusinesses
Perils insured: Excess rainfall, drought and cyclones
Reach: 25,000 people in 2021/2022 season
Payouts: In 2021/22 season, the program paid out $55,822; $206,113 in payouts-to-date
Country: VANUATU
Year launched: 2022
Project leader: U.N. (UNCDF, UNDP, UNU-EHS)
Insurer: VanCare Insurance Limited
Supported by: Governments of New Zealand and Australia
Perils insured: Cyclone (wind only)
Reach: 122 people
Payouts: In March 2023, the program paid out VT25.56 million ($217,000 USD) to 84 people for Cyclones Kevin and Judy
COUNTRY: KENYA
Year Launched: 2022
Project leader: Lemonade Foundation
Reinsurer: Lemonde Foundation
Supported by: Lemonade Foundation
Perils Insured: Extreme weather during crop growing season
Reach: 7,000 farmers
Payouts: In February 2023, the program paid out $167,791 USD to 3,248 people for drought.
COUNTRY: GUATEMALA
Year Launched: 2021
Project leader: World Food Programme
Insurer: Aseguradora Rural
Supported by: Government of Canada, European Union, IFAD and WFP
Perils Insured: Excess rainfall and drought
Reach: 9,400 smallholder farmers as of 2022, of which 1,659 people made contribution of 10% of insurance premium
Payouts: In 2021, the program paid out Q 270 ($100 USD).
COUNTRY: INDIA
Year Launched: 2023
Project leader: Kerala Cooperative Milk Marketing Federation (MILMA)
Insurer: Agricultural Insurance Company of India Ltd
Supported by: MILMA
Perils Insured: Decline in milk production during extreme heat days
Reach: 14,500 cattle covered at a price of 100 INR ($1.22 USD) per animal.
Payouts: Shortly after launching in April 2023, the trigger was reached. The product will pay out more than the premiums collected at the end of March.
