Liberty Mutual Reinsurance (LM Re), the reinsurance arm of Liberty Mutual Insurance Group, has partnered with XS Latam and SFA CEBAR to launch a parametric agriculture product designed to financially protect Colombian farmers against adverse climatic conditions.
The product leverages the expertise of Floodbase and EarthDaily—a parametric flood platform providing advanced geospatial data and analytics for the agriculture sector.
Aimed at supporting livestock farmers, it is designed to strengthen resilience by helping prevent land loss, a common consequence of severe weather events in Colombia.
Colombia’s diverse topography makes it highly susceptible to both floods and droughts.
In November, widespread flooding devastated thousands of farms, and over the past decade, the country has experienced some of the most severe droughts in its history.
Building on LM Re’s successful drought protection pilot last year, the new product now covers both perils. Clients benefit from advanced flood mapping technology, with innovative trigger mechanisms enabling swift financial relief to affected policyholders.
The product also addresses the challenge of frequent cloud cover hampering satellite data—an issue that has previously rendered similar parametric solutions unsustainable in Colombia. LM Re’s solution can deliver a basis measure of the index daily.
Jean-Christophe Garaix, Head of Agriculture and Parametrics at LM Re, said, “With farmers in Colombia routinely relying on annual loans to farm their land, should adverse weather cause a herd loss, many must sell land to repay the loan. This product is designed to mitigate that risk, making farming much more resilient. It also simultaneously reduces the risk banks face in offering finance, creating the potential for cheaper loans, which will further help support resilient farming in Colombia.”
