Guy Carpenter & Company, LLC announced that it will receive a $1.0 million grant from the International Finance Corporation (IFC), a member of the World Bank Group, to help develop a market for weather, index-based microinsurance in order to benefit farmers in Mozambique, where the majority of the population depends directly on agriculture for economic subsistence.
Under the grant, Guy Carpenter will collaborate with global catastrophe risk experts Risk Management Solutions (RMS) to design and implement new and affordable index-based insurance products for flood and drought risks. RMS will provide the complete risk modeling and risk quantification metrics necessary to transparently price the risk for products that minimize operational costs and thereby facilitate activation of the program.
Guy Carpenter also will work on developing the local market and capacity needed to support weather index insurance and on scaling agricultural index insurance into a commercially viable and sustainable product.
The Global Index Insurance Facility is a multi-donor trust fund managed by IFC and jointly implemented with the World Bank. GIIF is funded by the European Union, Japan and the Netherlands. GIIF’s objective is to expand the use of index insurance as a risk management tool in agriculture, food security and disaster risk reduction.
IFC will work with Guy Carpenter through its Global Index Insurance Facility (GIIF) Program, established in 2009 to assist the development of index-based insurance for natural disasters and weather risks in developing countries where insurance is rarely available.
Alex Bernhardt, Head of GC Micro Risk SolutionsSM, Guy Carpenter & Company, stated, “Access to insurance will help farmers in Mozambique protect themselves from potentially devastating flood and drought-related losses and assist them in accessing the capital they need to invest in inputs and production to improve crop yield and food security. We are proud to be a part of a solution that will contribute to overall economic development in Sub-Saharan Africa, and we look forward to working with IFC and RMS to help support Mozambique’s vital agricultural community.”
Peter Maina, Program Manager, GIIF, IFC, added, “IFC’s desire to work with industry leaders like Guy Carpenter and RMS to bring sustainable financial solutions to where they are needed most underscores our ongoing commitment to helping people escape poverty and improve their lives. The project will support economic growth in Mozambique by protecting its important agricultural base and allowing it to flourish.”
Dr. Pane Stojanovski, Vice President of Model Development Operations, RMS, commented, “The devastating catastrophic events worldwide in 2010 highlighted that building effective and efficient catastrophic risk management solutions that benefit the poor is vital for sustainable economic development. A crucial barrier to deploying such solutions is a lack of data and analytical expertise in areas with significant catastrophic exposures and large vulnerable populations at risk, such as Mozambique. RMS is committed to filling this gap in the international development marketplace, which will in turn help to protect the livelihoods of the disadvantaged.”