Increase climate-smart insurance helps protect vulnerable farmers.

July 5, 2024
1 min read




Article Summary

TLDR:

  • Climate-related disasters caused $250 billion in damages worldwide last year
  • Parametric insurance is gaining popularity for vulnerable farmers

The increasing frequency of extreme weather events is hitting low-income and agriculture-dependent households in emerging markets disproportionately hard. Luxembourg-based IBISA designs and prices parametric products for insurers and other financial institutions that protect farmers and agrifood businesses in Africa and Asia against drought, typhoons, flooding, high heat, and other weather incidents. The insurance tech company recently raised $3 million in an early funding round.

Key Points from the Article:

Climate-related disasters caused an estimated $250 billion in damages worldwide last year, with the increasing frequency of extreme weather events disproportionately affecting low-income and agriculture-dependent households in emerging markets.

Parametric insurance, which automatically pays policyholders when specific incident thresholds are triggered, is gaining popularity for vulnerable farmers. IBISA, a Luxembourg-based company, designs and prices parametric products to protect farmers and agrifood businesses in Africa and Asia against various weather incidents such as drought, typhoons, and flooding.

IBISA recently raised $3 million in an early funding round backed by Acumen’s Resilient Agriculture Fund, Ankur Capital, Equator, and the Asian Development Bank. The company partners with insurers to provide heat stress protection for dairy farmers in India and excess rainfall and wind coverage for farmers in the Philippines.

Other parametric insurance providers include Switzerland-based Pula, Brazil-based Newe, and Zambia-based Acre Africa. These providers offer protection to farmers and low-income communities against climate-related risks. Insurance startups in the US and Europe are also exploring the parametric insurance model, with companies like FloodFlash in the UK and Floodbase in the US providing coverage for flood victims.


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