Global Parametrics to design Peru’s first parametric earthquake insurance solution

Global Parametrics (part of CelsiusPro Group), has announced the development and planned pilot of Peru’s first parametric earthquake insurance product, specifically designed to help protect 17,000 low-income household members against earthquake risk in Lima, Peru.

The parametric product, which will be supported through the Natural Disaster Fund’s (NDF) Technical Assistance Facility (TAF) grant, will help safeguard livelihoods and mitigate the longer-term impact of earthquakes on employment and household incomes across Lima.

The pilot aims to protect 5,000 vulnerable policyholders, supporting approximately 17,000 household members, primarily based in low-income and progressive housing.

According to the announcement, this will lay the groundwork to scaling the product to up to 20,000 policyholders in its second year and for expansion beyond Lima.

The product will initially have a key focus on Lima, where Global Parametrics, in partnership with MicroInsurance Centre at Milliman, Three Fin Consulting, Swisscontact, La Positiva Seguros and local microfinance institutions, will be able to work closely with local stakeholders, monitor implementation and assess the effectiveness of the product before scaling.

Moreover, Global Parametrics explained that partnering with Swisscontact Peru supports a more holistic approach to resilience building, providing further support to progressive housing homeowners through risk reduction activities, including capacity building for local builders.

Mark Rueegg, Founder and CEO of CelsiusPro Group, commented: “Delivering this pilot initiative in Peru marks the first signed NDF TAF grant contract signed since the replenishment of the TAF by the UK Government’s Foreign, Commonwealth and Development Office (FCDO) announced in June.

He continued: “Piloting this parametric insurance product against earthquake risk will demonstrate how innovative risk transfer solutions can provide greater financial stability for vulnerable households. By combining data with local expertise, we are developing practical solutions that can help close the protection gap and build greater resilience to natural hazards.”

Peru is highly vulnerable to earthquake risk, as it lies in one of the world’s most seismically active regions along the convergent plate boundary between the Nazca and South American Plates.

In addition, low-income households are especially vulnerable to the financial impacts of earthquakes.

Having limited access to appropriate risk management tools, along with housing informality and the fact that the locations of many homes happen to be located in highly seismic areas can make it increasingly difficult for traditional insurers to provide affordable coverage for vulnerable households.

As a result, this parametric solution being developed by the NDF will offer further ways to extend protection to these vulnerable households, including those without formal property titles.

In addition, the parametric quake product will also be tailored to livelihood protection, recognising that the financial impact of an earthquake can extend beyond physical damage to homes and assets.

By providing financial support following a qualifying seismic event, the solution aims to help households manage immediate costs and reduce the potential disruption to employment and household incomes.

John Caroll, Consultant and Latin America Specialist for the MicroInsurance Centre, said: “We will integrate customercentric design at every stage of product development and piloting, incorporating input and validation from the target market throughout the process. We intend to engage in co-design approaches with our consortium partners. We are encouraged by our partners’ dedication in the lead-up to the pilot launch and are confident that, together, we can design a valuable and sustainable solution to protect low-income households and those living in progressive housing.”

Swisscontact Chairman, Thomas Meyer, added: “Our partnership with Global Parametrics, alongside our Vivienda Progressiva (VIPRO) Program, will link insurance to our risk reduction programmes, combining financial resilience with measures designed to reduce exposure to earthquake risk. Peru is a vital location for this work: according to CENEPRED (2025), over 14.8 million people and 4.6 million homes face very high seismic risk. By combining financial protection with practical risk reduction measures, we can help vulnerable households and local communities prepare for and recover from the impact of earthquakes.”

Lourdes del Carpio, Agrarian Insurance Manager at La Positiva Seguros, noted: “The evolution of the insurance sector depends on our ability to keep developing solutions that respond to the country’s changing protection needs. At La Positiva, we see innovation as an ongoing commitment to expanding the possibilities of insurance and reaching new segments. This initiative allows us to explore further applications of parametric insurance in Peru and contribute to the development of solutions tailored to the needs of families living in progressive housing.”

The Natural Disaster Fund (NDF) was launched back in 2018 by Global Parametrics and was seeded by the UK’s Department for International Development (DFID) later on that same year.