Partnership for climate insurance in Peru

A new public-private partnership between the Peruvian government, agricultural businesses and the insurance industry will protect farmers from the effects of climate change.

The livelihoods of farmers in Peru are increasingly threatened by severe yield fluctuations due to drought, flooding and frost that can lead to total crop failure. A new private-public partnership between the Peruvian government, agricultural businesses and the insurance industry aims to reduce the concerns facing farmers in the future. The plan is to develop a national risk transfer system over the next five years. This system will offer affordable and long-term protection against the income losses associated with natural hazards that threaten farmers' livelihoods. The project is being supported through funding from the International Climate Initiative of the German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB).

The reinsurance company Munich Re and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH are providing advisory services on these issues to their Peruvian partner on behalf of the BMUB. One aim is to create an agricultural information system that will provide data on the total crop yields achieved by individual farms, which crops are being planted where, and how climatic conditions are developing in various regions. The system targets agricultural businesses of all sizes and will be used to calculate insurance risks and costs. In addition, it will help relevant authorities to plan and assess more accurately the emergency assistance measures and compensation needed as a result of extreme weather events.