SEADRIF & WFP launch US$1.1m parametric policy to boost disaster resilience in Lao PDR

The SEADRIF Insurance Company and the United Nations World Food Programme (WFP) have launched a parametric insurance policy in Lao PDR that will provide pre-arranged financing of up to US$1.1 million, to enable timely support to communities impacted by extreme weather and other natural hazards.

As per the announcement, the parametric policy complements the government’s existing sovereign policy, which provides financial protection for national disaster response efforts.

Climate shocks across Lao PDR are increasing both the frequency and severity of floods, droughts and storms.

Rural communities are said to be hit the hardest due to the fact that livelihoods are closely tied to agriculture, and food insecurity remains a persistent challenge. Given this, rapid support for vulnerable households, including through cash-based assistance, is highly critical when disasters strike so communities can prepare and protect their homes and livelihoods.

SEADRIF and WFP’s parametric insurance policy reportedly brings together government, humanitarian, and disaster risk financing partners in a public-private collaboration aimed at enhancing preparedness and fostering long-term resilience against climate and disaster-related risks.

Mr. Vongkham Phanthanouvong, Director-General of the Social Welfare Department, Ministry of Labor and Social Welfare, Lao PDR, commented: “The SEADRIF parametric insurance policy represents an important step in strengthening our national systems to prepare for emergencies and better protect vulnerable communities.

Adding: “By working with WFP, we can plan more effectively and ensure timely, predictable support for people impacted by climate-related shocks. This collaboration demonstrates our shared commitment and strong partnership to building resilience and safeguarding livelihoods across Lao PDR.”

SEADRIF revealed that coverage spans across multiple different hazards, including floods, tropical cyclones, earthquakes and landslides, providing up to US$1.1 million in annual protection.

“Payouts are activated as disaster effects accumulate, starting when at least 200,000 people are affected and scaling up as impacts increase. WFP subscribed to this policy with funding from the Global Shield Financing Facility (GSFF),” SEADRIF said.

In addition, the parametric policy also mirrors the structure of the existing sovereign disaster insurance programme co-designed by Lao PDR and SEADRIF, that was launched in 2025.

The program introduced the world’s first-ever impact-based insurance policy, where payouts are triggered based on the number of individuals impacted, as indicated by official government statistics, instead of relying on hazard assessments or modeled losses.

Following a series of disaster events in 2025, which includes Tropical Cyclones Wutip and Wipha and associated flooding, the SEADRIF policy reportedly provided US$2 million to the Government of Lao PDR within days, which clearly highlights how well-designed disaster risk financing instruments can deliver rapid, rules-based financing at scale, in order to support immediate disaster response efforts.

“WFP is building on this progress by replicating the government’s policy in 2026. The policy came into effect on 1 May 2026 for a twelve-month coverage period, with implementation anchored in Lao PDR’s shock-responsive social protection system. Once triggered, payouts will finance WFP’s response operations and be deployed in coordination with the government through a jointly agreed response plan. The policy is expected to support over 31,000 vulnerable people through timely cash-based transfers and linkages with national social protection systems,” SEADRIF added.

Marc-André Prost, WFP Laos Representative and Country Director, said: “This SEADRIF parametric insurance policy shows how innovative disaster risk financing can reach the most vulnerable households while also strengthening national shock‑responsive systems. Through this policy and resulting partnerships, WFP can ensure it has the resources required to deliver rapid, predictable, people‑centred support to communities affected by climate‑related shocks in coordination with the Ministry of Labor and Social Welfare.”

SEADRIF also went on to state that the experience in Lao PDR will inform further development of disaster risk financing solutions across the region, as countries continuously seek to obtain more innovative and coordinated approaches to managing climate risk.

Benedikt Signer, CEO of the SEADRIF Insurance Company, added: “This policy extends financial protection directly to households—the people most exposed when disasters hit. It builds on the sovereign programme we co-designed with Lao PDR and demonstrates what is possible when government, humanitarian, and risk finance actors work towards a shared vision for resilience. We see this as a model for the region.”

Meanwhile, we recently reported that the WFP is currently exploring plans to become the first to utilise catastrophe bonds for food security financing, in a novel transaction that would see it become the first UN agency to sponsor a cat bond, with a target to source up to $100 million in risk transfer to boost drought resilience in Sub-Saharan Africa.