First MiCRO natcat business interruption cover launched in Guatemala
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Guatemala is highly exposed to natural disasters. In 2010 alone, two consecutive disasters - storm Agatha and the eruption of Pacaya volcano - caused an estimated USD 1.55 billion of damage, accounting for 4.1% of the GDP.
While each disaster has a devastating impact on lives, families and livelihoods, it also affects the economy and the country's growth and development potential for years to come. That is why Swiss Re is partnering in the launch of Esfuerzo Seguro, the first natural catastrophe microinsurance cover in MiCRO's Central American Program.
Esfuerzo Seguro is the first index protection offering business interruption cover to rural populations in Guatemala, for losses caused by severe drought, excess rain and earthquake. More specifically, the product is targeted to support financially vulnerable individuals engaged in small farming or entrepreneurial activities.
"Swiss Re is proud to support MiCRO in this progressive endeavor, expanding access to insurance to those people who are vulnerable to the severe impacts of weather," said Paula Pagniez, Senior Microinsurance Specialist at Swiss Re. "We are committed to supporting MiCRO as it expands this first-of-its-kind parametric protection via CADME (The Central America Disaster Microinsurance Expansion Programme)."
How it works
Esfuerzo Seguro is distributed by insurer Aseguradora Rural, bundled with loans provided by bank Banrural. The product was designed to meet the affordability standards indicated by clients, and will offer quick, transparent and hassle-free payments in case of risk events. The cover is complemented with a Disaster Risk Reduction component where the delivery of a 72-hour Emergency Kit with specific training on disaster risk preparedness is at the core. In addition, weather information will be shared via mobile phones with the support of CONRED (Guatemalan National Coordinator for Disaster Reduction) and mobile services provider Tigo.
The product was launched in mid-November as a pilot in the areas of Huehuetenango and Chiquimula, which will allow for testing and adjustment of operational and sales aspects, followed by a scale-up on the national level.
Following the successful launch in Guatemala, MiCRO and Swiss Re are working with partners to replicate the product in El Salvador targeted to early 2017.
Photo Credits: Jorge Barrientos, MiCRO