Ecuador Strengthens Agricultural Resilience with Parametric Insurance Solution

🔍 New case study: Developing agricultural resilience in Ecuador.    🇪🇨 Ecuador has launched its first parametric agricultural insurance policy, creating a new model for protecting smallholder farmers from climate shocks, backed by the policy, regulatory and institutional foundations needed for long-term resilience.    ✔ Protecting 10,000 people (2,511 smallholder farming households) across 21 cantons and four provinces.    ✔ Delivering rapid financial support to maize and rice farmers affected by drought and excess rainfall.    ✔ Establishing a blueprint for agricultural risk financing that other climate-vulnerable countries can adapt.    The case study explores how the Tripartite Agreement Programme, a partnership between UNDP, Insurance Development Forum and Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF), supported the design and placement of the policy, including 100% premium financing in its first year.    It also highlights how government agencies, regulators, insurers and farming communities worked together to develop the solution, as well as innovative approaches to reach unbanked farmers through direct cash transfers and mobile communication channels.    Ecuador’s experience offers valuable insights for countries seeking to strengthen agricultural resilience, expand financial protection and scale climate and disaster risk finance solutions.    Read the case study in English and Spanish: https://lnkd.in/dcN_DCpH    UNDP PNUD Ecuador Insurance Development Forum Federal Ministry for Economic Cooperation and Development (BMZ) InsuResilience Solutions Fund (ISF) AXA Climate Guy Carpenter Blue Marble Superintendencia de Compañías, Valores y Seguros Federación Ecuatoriana de Empresas de Seguros FEDESEG Junta de Política y Regulación Financiera y Monetaria (JPRFM) Hispana de Seguros y Reaseguros Ministerio de Agricultura, Ganaderia, Acuacultura y Pesca Lauren Carter Miguel Solana Ceandra Faria Loïc Martel Jorge Luis Morillo Erazo Inka Mattila   

Three reports on agricultural insurance landed within weeks of each other this June and July, and together they look set to give a genuinely comprehensive picture of where the sector stands and where it's headed. "Government Pathways to Transform Agricultural Insurance Systems by UNDP Sustainable Finance" takes on a question most people skip past: which government ministry should even own this agenda? UNDP maps three different institutional routes countries have taken, drawing on 14 country case studies, with India, Uganda and Türkiye featured in closer detail. "The State of Agricultural Insurance by Environmental Defense Fund and International Food Policy Research Institute (IFPRI)" pulls back to the global picture, built on eleven case studies spanning the US, Mongolia, Kenya and more, looking at how insurance can be better linked to climate resilience and sustainable farming. "Scaling Agricultural Insurance for Smallholder Farmers: Gaps and Opportunities for Financing in Sub-Saharan Africa by Tetra Tech," commissioned by the Gates Foundation, gets specific and practical: an eight-pillar framework built from field missions to Ethiopia and Zambia and a Nairobi workshop with practitioners, aimed at where donor money should go next. Three different lenses on the same protection gap. Adding all three to my reading list, and if you work anywhere in agriculture insurance, parametric insurance, agri-finance, or climate risk, they're worth adding to yours too. Below are links to these reports for your reference: 🔗 UNDP: https://lnkd.in/dUcit7K5 🔗 EDF/IFPRI: https://lnkd.in/dePXkhUX 🔗 Tetra Tech/Gates Foundation: https://lnkd.in/dP_iwtpd Will be diving into all three over the coming weeks and plan to share my synthesis once I do. #AgriculturalInsurance #ParametricInsurance #ClimateRisk #FinancialInclusion

An insightful article from #IFPRI highlighting the evolving role of agricultural insurance, not simply as protection for farmers, but as a key component of resilient agrifood systems. The article makes a compelling case that insurance should be viewed as critical risk infrastructure, helping stabilize production, strengthen supply chains, support rural finance, and enable longer-term investment across the value chain. It also shares thoughts/cases on embedding insurance within input packages, credit, and other farm services to reduce transaction costs while expanding farmer coverage. One complementary point that deserves greater attention is the role of public support. Mature agricultural insurance systems in the U.S. and many European countries rely on significant government investment, through premium subsidies, public reinsurance, and catastrophic risk sharing. These programs did not become successful as purely commercial markets. As governments, MDBs, investors, and development partners seek to expand agricultural insurance in emerging markets, this experience is worth acknowledging. The challenge is not whether public support should exist, but how to design it in ways that crowd in private investment, strengthen market resilience, and remain fiscally sustainable over the long term. As climate and market risks continue to grow, agricultural insurance should increasingly be viewed not as a cost, but as strategic infrastructure for resilient food systems. #foodsystems #agricultureinsurance https://lnkd.in/egsn6fHk

FROM RISK TO RESILIENCE:How Agricultural Insurance is Supporting Climate Adaptation in Africa Agriculture is the backbone of many African economies, especially in Kenya and across East Africa. Yet, it is also one of the sectors most vulnerable to climate change and one of the least insured. Climate shocks like droughts, floods and unpredictable rainfall are no longer rare. According to #UNDP insights, these events are already affecting millions of people and disrupting food systems, incomes and economic stability. On the ground, the impact is clear: * A Farmer in Machakos delays planting due to uncertain weather patterns. * A tea farmer in Kericho yields decline, affecting both households and markets Without financial protection, many farmers are forced to reduce investment or adopt low-risk, low-return strategies just to survive. This is where agricultural insurance plays a critical role. Across Kenya and the wider region, index-based and parametric insurance solutions are helping shift the narrative from recovery to resilience. Instead of waiting for losses to be assessed, payouts are triggered by data such as rainfall levels or vegetation cover. This means: * Faster payouts during climate shocks * Reduced financial losses for farmers * Greater confidence to invest in farming Technology is also playing a key role. Mobile platforms now allow farmers to register, pay premiums and receive payouts more easily, improving accessibility and efficiency. At a broader level, reinsurers and regional bodies—through conversations within the African insurance ecosystem,are emphasizing the need for collaboration. Climate risk is systemic and addressing it requires partnerships across insurers, governments and development institutions. From an ESG perspective, agricultural insurance delivers real impact: * It supports environmental resilience through climate-smart practices * It protects livelihoods and promotes financial inclusion * It strengthens risk management through data and structured Agricultural insurance in Africa is evolving beyond a traditional product. It is becoming a key tool for climate adaptation and sustainable growth. For insurers and organizations willing to innovate, the opportunity is not just to manage risk—but to build resilience across the continent. #Zepre #insurance #sustainableinsurance #agricultureinsurance #ESG #riskmanagement #Africainsurance #Heritageinsurance

🌾 A €2 billion decrease in expected production of wheat, barley and maize in the EU. That is the projected toll of this summer's drought and heat, reported by the Financial Times last week, building on Energy and Climate Intelligence Unit research.   This isn't only a story about serious climate driven loss and damage for farmers and rural communities. Agri-food system shocks are also a source of macroeconomic and fiscal risk - a risk largely missing from the economic policy agenda.   Work by Daisy Jameson, Madeleine Tron and myself at CETEx (Centre for Economic Transition Expertise) shows that when crop yields fail across a member state or region, the effects cascade beyond the farm gate into the macroeconomy through food-price inflation and household inflation expectations; disrupted supply chains; weaker trade balances; and pressure on rural lending and the insurance that underpins it.   And that's the part that gets overlooked: the fi-compass showed that in the EU, 70-80% of climate-related crop losses are uninsured. Without insurance to serve as a financial buffer, farmers are left vulnerable to extreme weather events, and governments are often left to pick up the bill through unbudgeted bailouts that register on the public balance sheet as contingent liabilities.   Crop insurance is one tool to shift some of that fiscal risk off public balance sheets. But only if it's designed to reduce risk, not just transfer it - rewarding farmers for on-farm or community-level adaptation instead of "building back the same".   With the live discussion around the EU's post-2027 CAP policy design, and the UK's ongoing agricultural and land use reforms, now is the moment to rethink the role of insurance in the agri-food system- both as a resilience building mechanism for farms and a tool for fiscal sustainability.   Read my full commentary below👇

Scaling Agricultural Insurance in Africa:From Risk Transfer to ESG-Driven Resilience 🌍🌱 Agricultural insurance across Africa is undergoing a fundamental shift. What was once largely viewed as a post-loss compensation mechanism is now increasingly positioned as a forward-looking tool for resilience, particularly in the face of intensifying climate volatility. In regions such as Kenya and the broader Horn of Africa, including Ethiopia, climate risks are no longer isolated events but systemic exposures that continuously disrupt agricultural productivity and farmer livelihoods. This shift has necessitated a move toward more adaptive and data-driven insurance models. In practical terms, we are seeing increased adoption of index-based solutions that leverage satellite data and weather analytics to trigger payouts. This not only improves efficiency but also enhances underwriting precision and reduces the operational complexities traditionally associated with claims assessment. At the same time, there is a growing emphasis on integrating insurance within broader risk management ecosystems. In parts of East Africa, agricultural insurance is being aligned with early warning systems and climate data infrastructure, enabling more proactive responses to emerging risks. Insights from recent UNDP discussions highlight how such integration strengthens the ability of vulnerable communities to absorb shocks before they escalate into full-scale crises. There is also a clear evolution in how insurance markets are being structured across the continent. In more developed markets such as South Africa, blended financing models are enabling better risk distribution through the participation of insurers, governments, and development partners. Similarly, in markets like Egypt, strong regulatory frameworks and public-private collaboration are playing a key role in improving affordability, scalability, and long-term market confidence. Underlying all of this is the growing influence of ESG. Environmental considerations are shaping how risks are modelled and priced, social factors are driving financial inclusion and protection of smallholder farmers, and governance structures are ensuring stability, transparency, and sustainability within insurance systems. ESG is therefore no longer a peripheral consideration — it is becoming embedded in the very design and delivery of insurance solutions. Ultimately, the trajectory is clear: agricultural insurance in Africa is moving beyond reactive compensation toward anticipatory resilience. It is not just about transferring risk, but about strengthening livelihoods, stabilizing food systems, and supporting sustainable economic growth. The real opportunity lies in developing solutions that are not only innovative, but also deeply aligned with Africa’s unique climate and socio-economic realities. #ESG #AgriculturalInsurance #ClimateRisk #Africa #SustainableFinance #InsuranceInnovation

But Uganda's experience shows how agricultural insurance can evolve from fragmented pilots into a structured national scheme. Through the Uganda Agriculture Insurance Scheme, the country has combined differentiated premium subsidies, a consortium of insurers, regulatory innovation and development partnerships to expand protection for farmers facing climate and production risks. Agriculture contributes nearly a quarter of Uganda's GDP and provides employment for more than 70 per cent of the labour force, making effective agricultural risk management critical to livelihoods and food security. This case study from UNDP explores how Uganda has moved from pilot initiatives to a public-private agricultural insurance system that supports resilience and adaptation in one of the world's most climate-vulnerable countries. Read the case study: https://lnkd.in/dtTPc_sW Explore the full report: https://lnkd.in/eiwBrK-N UNDP Sustainable Finance |#FinancialResilience Gates Foundation

Uganda's agriculture insurance journey featured in this new case study by UNDP Uganda and UNDP Sustainable Finance , a timely reflection on how far the sector has come and what is possible through sustained collaboration. Over the years, we have seen firsthand that building a resilient agriculture insurance market requires more than insurance products alone. It takes well-targeted premium subsidies that respond to different farmer needs, a strong consortium of insurers that can responsibly pool risk, an enabling regulatory environment, and committed development partners willing to invest in long-term systems change. The Uganda Agriculture Insurance Scheme has demonstrated that, with the right partnerships and institutional framework, agriculture insurance can evolve from isolated pilot projects into a national mechanism that strengthens resilience for farmers across the country. We are encouraged to see this journey, the lessons and opportunities documented. Read full case study here: https://lnkd.in/dtTPc_sW

𝐓𝐡𝐞 𝐆𝐫𝐨𝐰𝐢𝐧𝐠 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐨𝐟 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐢𝐧 𝐀𝐠𝐫𝐢𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐓𝐨𝐝𝐚𝐲. Agribusiness insurance has evolved beyond basic coverage into sophisticated, technology-driven solutions that address complex risks while strengthening global food security and economic resilience. 🔗 𝐑𝐞𝐚𝐝 𝐦𝐨𝐫𝐞 𝐨𝐧 𝐨𝐮𝐫 𝐰𝐞𝐛𝐬𝐢𝐭𝐞: https://lnkd.in/gyhBUMWi #Agribusiness #BusinessNews #IndustryInsights #AgriInsurance #RiskManagement

Congratulations to Rahel D. and the entire Tetra Tech International Development team on the publication of this important report. It was a privilege to contribute as a co-author alongside such an outstanding group of researchers and practitioners. This work highlights that scaling agricultural insurance for smallholder farmers requires more than innovative products—it demands collaboration, evidence-based decision-making, and solutions that are grounded in farmers’ realities. I am grateful to everyone who contributed to this research, especially the stakeholders and farming communities in Zambia and Ethiopia whose insights made this work possible. I look forward to seeing these findings inform policies and investments that strengthen resilience and improve livelihoods across Africa. I invite you to read the report and join the conversation on how we can make agricultural insurance more accessible, scalable, and impactful for millions of smallholder farmers. #AgriculturalInsurance #SmallholderFarmers #Research #Africa #ClimateResilience #FinancialInclusion