Parametric Insurance Solution for the Dominican Republic’s Vulnerable Population

The Dominican Republic has experienced over 51 natural disasters in the last two decades, resulting in nearly 1,000 fatalities and affecting 4.8 million people. Among these disasters, tropical storms have been the most economically devastating, causing intense rainfall and widespread losses that disrupt lives and livelihoods. To enhance the country’s resilience to climate-related events, the InsuResilience Solutions Fund (ISF) is supporting a partnership between the Dominican Republic’s social protection program Supérate, along with an international consortium comprising Guy Carpenter Mexico – acting as the project lead – AXA Climate, Blue Marble Microinsurance, and Celsius Pro, working in collaboration with the United Nations Development Programme (UNDP).

The project will develop an innovative parametric insurance product to protect vulnerable families from the economic impacts of wind, drought, and excess rainfall – hazards that can bring economic activities to a halt. This insurance solution will serve as a disaster risk finance instrument, complementing the Dominican Republic’s existing Emergency Bonus program (Monetary Conditioned Transfers).

The insurance product aims to:

• Guarantee quick access to financial resources for the government to respond to emergencies without reallocating budgets.
• Support Supérate program beneficiaries with prevention and guidance efforts to better prepare for catastrophic events.
• Ensure the product’s placement in local and international reinsurance markets to provide a robust financial safety net.
• Facilitate direct payments from reinsurance companies to end beneficiaries in the event of a claim.
• Leverage Supérate-led enrolment campaigns to educate beneficiaries on risk exposures inclusively and accessibly.

UNDP will support continuous engagement with government stakeholders to ensure alignment with national disaster risk strategies and climate resilience goals. The project will draw on models developed by CCRIF where applicable to enhance granularity and effectiveness.

Supérate officials have been involved in the project design and indicated strong support for this initiative, planning to allocate significant resources to support the implementation of the solution. If successful, the government aims to institutionalize the program through public policy, balancing risk transfer and retention strategies to build a resilient social protection framework for the most vulnerable populations in Dominican Republic.