French insurer and reinsurer SCOR has announced that it supports a recently launched insurance solution that leverages technology to improve drought resilience in Ethiopia, called the Satellite Index Insurance for Pastoralists in Ethiopia (SIIPE).
The project, which was started by the World Food Programme (WFP) and facilitated by re/insurance broker Willis Towers Watson, sees SCOR provide reinsurance support for the insurance product, as well as lending technical support for model validation and programme pricing.
The agricultural sector is vital to the Ethiopian economy, and as such, resilience to drought is important for many people’s livelihoods and survival, particularly poor pastoralist households.
According to an announcement by SCOR, the focus of SIIPE is to provide livestock asset protection insurance with the objective of keeping core breeding animals alive during significant droughts, “in other words, to build drought resilience in poor pastoralist households.”
The protection runs for seven months across two seasons in the year, and utilises satellite technology to assess the availability of forage for pastoralists.
SCOR, expands on some details of the new product: “The product index is based on NDVI in the predefined regions with triggers calibrated to ensure that payouts start to trigger when pasture and grazing resources are reduced to a point where animals will start to be stressed due to inadequate nourishment. The independent calculation agent for the index is the National Meteorological Agency, Ethiopia.”
“We look forward to working with the project’s partners to help improve risk management for pastoralists. This is just a starting point from which we can expand to help millions of pastoralists in Africa and elsewhere,” added SCOR.