Microinsurance news

An index-based livestock insurance program in Kenya, which was launched with the backing of the World Bank and with reinsurance from Swiss Re, has been triggered and will pay out $2 million to farmers hit by drought.

The World Bank’s Global Index Insurance Facility (GIIF) and African Reinsurance Corporation (Africa Re) have teamed up to provide a facility that will help to cap insurers loss ratios on weather index-insurance schemes in Africa.

Parametric or weather-index insurance cover through microinsurance schemes continues to expand its reach across Africa, a trend that could result in greater demand and utilisation of reinsurance and insurance-linked securities (ILS) capacity.

Lloyd’s of London, the UK Met Office, and reinsurance broker Guy Carpenter are working together to establish the concept of an agriculture weather index that can be used for insurance in Southeast Asia, with a report on the initiative set to be launched in London later this year.

Farmers in Kenya are set to benefit from the launch of a new innovative, index insurance scheme which utilises advanced technology and satellite data to assist agricultural workers in the face of flooding and drought conditions.

Canada is the latest country to announce a new contribution to climate risk insurance initiatives, aiming to increase insurance penetration and narrow the protection gap, at the Paris COP21 climate change conference.

The increased severity and frequency of extreme weather and climate-related disasters presents a grave threat to the important agricultural sectors of emerging economies, a trend that is likely to continue without adequate risk transfer solutions and improved disaster resilience efforts.

The African Risk Capacity (ARC) aims to double the coverage it provides to as much as $1.5 billion by 2020, by opening up its parametric insurance products to international organisations, such as United Nations agencies and non-governmental organisations (NGO’s).

Political will and the role of governments is an obstacle that makes it harder for the insurance, reinsurance and ILS industry to effectively begin to narrow the protection gap, according to a Swiss Re representative.

The government of Peru has established a catastrophe insurance facility for the countries farmers, buying a private risk transfer contract to cover around 550,000 hectares of crops, aiming to cover losses up to around $156m.