Swiss Re, USAID Partner on Microinsurance

In an effort to help vulnerable communities fight hunger, build resilience to climate change, and reduce the costs of natural disasters in the Americas, Africa and Asia, USAID and Swiss Re are partnering to provide customized, market-based insurance products.

The three-year partnership is intended to enable poor farmers and their families to better prepare for and cope with the impacts of the droughts, floods and other severe weather events that are predicted to become increasingly common as the climate changes.

“When farmers have better instruments to manage risk, they can more easily obtain the loans needed to invest in technologies that increase their yields and productivity, and have greater incentive to make those investments, knowing that they are buffered from extreme weather events,” the companies said.

Swiss Re will contribute knowledge of such risk management solutions to assist with two USAID efforts: The Global Climate Change Initiative, which aims in part to increase resilience to extreme climate events, and accelerate the global transition to a sustainable, low-carbon economy, and the Feed the Future Initiative, the United States Global Hunger and Food Security effort to help countries develop more resilient and productive agricultural sectors to address the root causes of hunger and under-nutrition.

“Private sector involvement is crucial to USAID’s efforts to reduce poverty and foster long term economic development in the countries where we work,” said USAID Administrator Rajiv Shah. “Swiss Re has been an industry leader in the development of innovative new products to address weather-related risks. We welcome this opportunity to join forces to develop affordable, market-based tools to reduce climate vulnerability in poor communities.”

This isn’t the first venture into microinsurance for Swiss Re. Just a month ago, the company unveiled a new cholera insurance scheme aimed at Haiti’s women entrepreneurs, in an effort to blunt the impact of cholera outbreak. And, Swiss Re is working with Oxfam America, the World Food Program (WFP) and USAID to protect farmers in Senegal against the potential impact of climate change on their crop yields.

“Building insurance capacity in developing countries is a critical step to limiting the vulnerability to extreme weather events that impact so many livelihoods,” said Walter Bell, chairman of Swiss Re America Holding Corporation. “Swiss Re’s innovative solutions, combined with USAID’s technical expertise and extensive development experience, will bring advanced risk management solutions to the communities who need them most.”