InsuResilience Solutions Fund supports a new project in Colombia for the upscale and improvement of an index-based climate protection coffee insurance solution for vulnerable smallholder farmers in Caldas and Antioquia regions to expand its reach to include Huila, Cauca and Nariño.
Based on the INFORM Index, Colombia ranks among the top twenty countries vulnerable to natural hazards with high exposure to extreme weather events like earthquake, tsunami and floods. Farmers experience prolonged dry spells, excess rainfall as well as delayed onset of rainfall, pests and other diseases, further enhanced by weather patterns of El Niño and La Niña. Putting a lot of pressure especially on the agricultural sector, it is the smallholder farmers that are most vulnerable and exposed to an increasingly difficult climate situation straining their resilience.
Contributing to the crucial objective of increasing the smallholder farmers’ resilience, the InsuResilience Solutions Fund (ISF), managed by the Frankfurt School of Finance & Management (FS), and financed by KfW Development Bank on behalf of the German Government, signed a grant agreement with Blue Marble, the local insurance company Seguros Bolivar and Fundación Local Partners which is supporting Colombian farmers to deliver sustainable coffee to the roasting industry. Based on the agreement ISF will co-fund the refinement of the climate risk insurance product, the on-boarding of additional aggregators and respective customisation of the insurance product, the development of digital interfaces and technical operation environment, customer education awareness raising campaigns and capacity building in view of climate smart agricultural practices.
Coffee is Colombia’s second export commodity, however there is no systematic offer of insurance for coffee farmers. Of the approx. 555,000 coffee farmers, the vast majority are smallholders producing exclusively as a source of income for whom a loss of harvest due to extreme weather events can have catastrophic effects on their livelihood. To strengthen the development of the Colombian agricultural insurance market, the partners launched an index-based insurance “Café Seguro” against drought and excess rainfall. The innovative character of the Café Seguro product, which will now be upscaled to other regions, lies in catering to the specific agronomic needs of coffee and being designed in close cooperation with the coffee farmers themselves. In case of an event, payouts will be provided directly to the farmers without the need for a claim’s report or on-the-ground loss assessment.
Managed by Frankfurt School
GRMA hosted by ISF
