Global Parametrics expands One Acre parametric scheme with Howden support

Global Parametrics, the parametric and index-based disaster risk transfer company, has partnered with broking group Howden to deliver an expansion to its parametric insurance scheme with One Acre Fund for smallholder farmers in Africa.

The expansion of the parametric insurance scheme is expected to result in close to 1 million farmers being covered under the risk transfer arrangement.

Global Parametrics has been working with the One Acre Fund in Tanzania since 2020, providing a parametric solution for farmers covering excess rain and drought risk.

Almost 175,000 smallholder farmers in Tanzania and Malawi are already covered under the parametric risk transfer scheme and the expansion announced sees smallholder farmers in Rwanda now able to access the protection.

Including Rwanda is expected to protect a further 800,000 people, taking the total covered to almost 1 million across the three African countries.

The parametric product provides access to financial protection and resources to help farmers mitigate the impacts of extreme weather.

This parametric solution is backed by the Natural Disaster Fund, a public-private partnership managed by Global Parametrics with seed investment from the UK’s Foreign, Commonwealth and Development Office and Germany’s BMZ via KfW, while global reinsurance company Hannover Re provides matching capacity.

Global Parametrics noted that the East African drought that affected Tanzania and Cyclone Freddy which killed more than 100 people in Malawi, have highlighted the need for greater protection for vulnerable farmers in the region.

After these events, the Tanazanian and Malawian parts of the parametric programme are expected to pay out over $650,000 to One Acre Fund’s smallholder farmers in those countries.

Insurance and reinsurance group Howden has provided premium subsidy to support the expansion of parametric protection in Rwanda.

This has enabled One Acre Fund to purchase more parametric coverage, so extending its assistance to more smallholder farmers that are vulnerable to extreme weather risks.

Angus Kirk, CEO of Global Parametrics commented, “We are delighted to be partnering with Howden and continuing to strengthen our relationship with One Acre Fund as we strive to address extreme weather and natural hazard risk in climate vulnerable countries.

“We hope this to be the first of many collaborations with Howden, and we look forward to making a positive impact together in the communities we serve.”

David Howden, Chief Executive Officer, Howden added, “We are proud to support this impressive programme – a great example of how insurance can help vulnerable communities to build resilience and have the confidence to invest in their own future.

“We hope to see initiatives like this play a much larger role in the global response to climate crises. To achieve this, we must bring private finance to the table in a much bigger way to enable those facing the worst impacts of climate change access the same financial instruments that most companies take for granted.”