The passage of hydrometeorological phenomena, such as Hurricane Agatha in May and the rains in Tabasco, caused the loss of crops 746 farmers, for which they were compensated thanks to a pilot parametric insurance launched by the federal government and the insurer Axa.
Daniel Bandle, CEO of Axa Mexico, highlighted that one of the main emerging risks for the country is climate change, as well as cybersecurity and pandemics.
Axa considers that small Mexican farmers are more exposed to the impacts of climate change because there are no resources that allow them to access irrigation systems.
For this reason, an alliance was created made up of the Secretaries of Finance and Agriculture (on the government side), a consortium of insurers and NGOs to develop a parametric insurance that protects small corn producers against short-term impacts of the climate change due to excess rain and drought.
The objective is to help producers not to lose their harvest, which is usually for self-consumption, since they are the most vulnerable to the risks of climate change. The program was carried out in Tabasco, Chiapas, Oaxaca and Guerrero.
Bandle said that the impact of this program is still being analyzed to evaluate its success and the possibilities of expanding it to other states of the Republic.
What is parametric insurance and how does it work?
An insurance of this type, according to Axa, is complementary to traditional insurance and as its name indicates, the compensation is in a certain parameter.
These insurances are paid easily and quickly because you only have to verify that the calculation standards are met. The standards are not set by an insurer, but by an independent agent.
The independent entity considers the damage caused by natural phenomena in other parts of the world and based on this, establishes the regulations.