Guy Carpenter has announced that they have received a $1m grant from the International Finance Corporation (IFC) to help develop a market for weather index-based microinsurance products in Mozambique. The initiative will aim to provide cheap, affordable insurance cover for farmers in a country where the population depends on agriculture for economic subsistence.
Guy Carpenter will collaborate with risk modeller Risk Management Solutions (RMS) on the initiative. With RMS’s help they plan to design and implement affordable index-based insurance products for flood and drought risks. RMS will provide risk modelling and risk quantification metrics which are necessary to be able to transparently price the risk for products which have minimal operational costs, vital for a microinsurance program where prices are kept to a minimum and policies are measured against actual weather conditions.
Guy Carpenter are also going to be working to develop the local market and capacity required to support weather index insurance and on scaling agricultural index insurance into a commercially viable and sustainable product. IFC will work with Guy Carpenter through its Global Index Insurance Facility (GIIF) Program, established in 2009 to assist the development of index-based insurance for natural disasters and weather risks in developing countries where insurance is rarely available.