Addressing climate risks in the agricultural sector: How can the insurance industry help?
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Index-based insurance is slowly gaining momentum in Bangladesh. In 2020, 316 flood-struck Boro rice farmers from the region of Gaibandha received compensation as part of a satellite-based agricultural-based flood index (IBFI) program. This program was developed by International Water Management Institute (IWMI) in partnership with Oxfam Bangladesh, CGIAR Research Programs on Climate Change, Agriculture and Food Security (CCAFS) and Water, Land and Ecosystems (WLE), Green Delta Insurance Company Ltd (GDIC), Swiss Re and SKS Foundation.
World Food Program (WFP), with Oxfam Bangladesh and GDIC, piloted another index-based climate risk insurance scheme in 2020. Funded by the Korea International Cooperation Agency (KOICA), this insurance aimed at supporting 2,000 casual agricultural labourers for wages lost due to prolonged monsoon floods.
The ‘Promoting Risk Mitigation Measures for Climate Change Adaptation (Surokkha)’ project by Swiss Agency for Development and Cooperation (SDC) and Syngenta Foundation for Sustainable Agriculture Bangladesh (SFSA Bangladesh) has plans to providing index-based crop insurance to 233,000 smallholder farmers by 2022.
The Syngenta Foundation also recently signed a grant funding agreement with The Frankfurt School of Finance and Management (FS), implementing agency of the InsuResilience Solution Fund (ISF) which is funded by KfW. With BRAC and GDIC as local partners, this grant aims to co-finance the development and scale-up of climate risk insurance for a range of crops to meet the needs of the smallholder farmers.
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