Historically, natural disaster events have affected the agricultural sector of Colombia, a larger contributor to the economy with 6.1% of the GDP and 16.3% of the total employment. Expected temperature increase in combination with changes to hydrology causing a reduction of rainfall will present a significant economic and social problem leading to shortage of water in the high lands, and more frequent floods in coastal areas. In order to protect stability and ensure sustainable growth to the benefit of vulnerable rural populations dependent on agriculture, the InsuResilience Solutions Fund (ISF) is co-funding the development and implementation of a complementary sovereign index-based insurance solution promoted by a project consortium formed by members of the Insurance Development Forum (IDF) in close cooperation with the Ministry of Agriculture.
To improve the resilience of the currently uninsured poor and vulnerable rural population of several Colombian departments against drought and extreme rainfall events, a new project consortium is formed by the Insurance Development Forum (IDF) members and Raincoat to promote the development of a complementary insurance solution. Today, Frankfurt School of Finance and Management (FS), managing the ISF, signed a grant funding agreement with the project consortium partners. This marks a public-private partnership project under the Tripartite Agreement between the German government, IDF and UNDP to support risk-management solutions for climate-vulnerable countries.
Co-led by Guy Carpenter Colombia and Swiss Re, the project partners Munich Re, AXA Climate, and Raincoat will join forces to develop an insurance solution for lack and excess of rainfall to complement existing social protection and national insurance schemes to the benefit of vulnerable households in rural areas starting in the departments of Choco, La Guajira, Meta and Cundinamarca. The latter represent the departments with the highest levels of extreme poverty in the country where primarily banana, potatoes, palm oil, corn, rice, soy and coffee are cultivated. In case of a catastrophic weather event, beneficiaries of the insurance solution will receive a direct payment through platforms used by the Ministry of Agriculture for other social programmes, and thus will have access to cash to cover their immediate needs and resume their productive activities as soon as possible.
Managed by Frankfurt School
GRMA hosted by ISF
