Willis and Global Parametrics provide drought insurance to Việt Nam’s coffee farmers
Willis and Global Parametrics provide drought insurance to Việt Nam’s coffee farmers
Willis (WTW) and Global Parametrics have issued the first payout under a new insurance policy protecting Vietnamese coffee farmers from 2024 drought losses.
Farmers select coffee beans in a farm in Buôn Ma Thuột City, Đắk Lắk Province. — VNA/VNS Photo |
Willis, part of Willis Towers Watson (NASDAQ: WTW), and Global Parametrics, have delivered the first-ever payout under a new insurance policy designed to protect coffee farmers in Việt Nam from losses due to low rainfall, during the 2024 coffee growing season.
Launched in early 2024, in partnership with Bảo Minh Insurance Corporation, the policy safeguards farmers’ revenue by using satellite data to monitor rainfall in key coffee-growing regions. If rainfall falls below a set threshold, payments are automatically triggered, ensuring quick financial support without the need for a lengthy claims process.
This type of insurance, known as parametric insurance, pays out based on pre-determined weather conditions rather than traditional damage assessments, allowing farmers to receive timely financial relief.
The initiative is backed by the Natural Disaster Fund (NDF), managed by Global Parametrics and funded by the UK government’s Foreign, Commonwealth and Development Office, along with Germany’s development bank KfW. It is part of the broader 'De-Risk South-East Asia' programme, developed in collaboration with ECOM Agroindustrial Corp Ltd and the University of Southern Queensland.
Việt Nam, the world’s second-largest coffee producer, faces increasing climate risks, with changing rainfall patterns threatening yields. This innovative insurance solution provides a crucial safety net, helping farmers adapt to extreme weather and secure their livelihoods.
Chief Executive of Global Parametrics, Angus Kirk, said: “We are delighted that the parametric cover has effectively protected coffee farmers in Việt Nam. Many of these farmers operate on a small scale with limited financial resources, which constrains their ability to cope with the impact of deviations in rainfall and temperature patterns on their crops.
"We look forward to continuing our work with our partners in Việt Nam.”
