Parametric Insurance Case Studies
The Insurance Development Forum is coordinating a survey of parametric insurance solutions, to publish case studies that can enhance understanding of applied structures and modelling.
Parametric risk transfer instruments have gained increasing cross-sector interest over the past decade as an innovative way to manage the financial impact of disasters in both developed and developing countries. This parametric project seeks to increase the amount of information openly available by providing detailed case studies on global solutions that have been placed in the re/insurance market. The ultimate goal of this survey is to enhance understanding of these products and help inform their future development globally.
This initiative was led by IDF RMSG and Guillermo Franco (Guy Carpenter). Individuals and organisations interested in contributing to this effort should reach out via this form.
Case Studies
Case Study
Lack of rainfall parametric cover for hydropower production in South Africa
PARTNER: Descartes
This product provides coverage to a South African hydropower company for lost revenue when there is a cumulative lack of rainfall measured by satellite data and weather stations.
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Case Study
Parametric cover for Jamaican Credit Unions impacted by extreme hurricanes
PARTNER: Skyline Partners
This insurance product uses a parametric trigger to make payouts to the Jamaican Co-operative Credit Union League in the event of an extreme hurricane resulting in smallholder farmers defaulting on loans. The product is based on Skyline’s proprietary FatTrackTM methodology, which uses reported wind fields.
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Case Study
Mesoamerican Reef Fund Insurance Program
PARTNER: WTW
The Mesoamerican Reef (MAR) Fund provides a source of financing to respond to any local negative impacts to the reef, with this insurance solution scaling the available finance in response to major hurricane impacts. This product, in place since 2021, covers 10 sites using a Cat in Nested Circles approach.
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Case Study
Parametric insurance for Papua New Guinea telecommunications infrastructure against earthquake risk
PARTNER: Pacific Catastrophe Risk Insurance Company (PCRIC)
A bespoke product to provide PNG Data co. with parametric insurance in the event of earthquakes damaging critical submarine fibre optic cables, key to the information and communication industries. The product uses a trigger of peak ground acceleration provided by USGS, with payouts used to repair cables swiftly.
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Case Study
World Food Programme's Sahel Climate Catastrophe Layer
PARTNER: World Food Programme (WFP)
WFP is piloting a regional Sahel Climate Catastrophe Layer (SCCL) in Burkina Faso, Mali, and Niger, providing financial protection against severe droughts. The program, incepted during the 2024-2025 West Africa growing season, offers coverage for the most extreme regional drought events and complements existing national-level risk financing tools.
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Case Study
An Unconventional Solution to Sovereign Parametric Flood Insurance in data scarce environments: Lessons From Laos
PARTNER: Southeast Asia Disaster Risk Insurance Facility (SEADRIF)
A novel multi-hazard parametric insurance product that uses the Government of Laos’ reported disaster impact data to trigger insurance payouts. This approach increases the Government’s financial resilience, whilst ensuring that payouts are aligned with on-the-ground expectations and minimising basis risk.
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Case Study
World Food Programme’s Syria Climate Catastrophe Parametric product
PARTNER: World Food Programme (WFP)
WFP has designed and implemented a climate risk insurance policy to support its drought response efforts in Syria, providing protection against severe food insecurity in three areas, mitigating the need for harmful coping mechanisms.
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