Climate change has increased the intensity and regularity of extreme weather on Peru’s northern coast. Meteorologists are even talking about the possibility of an El Niño-like storm in the region at the start of 2013. Local banana farmers are building dams and protective barriers, but what happens if the dams break? Who pays for the lost harvest? In Peru, the answer might soon be insurance. Working with local companies, the German aid agency GIZ is developing a climate index that would use weather forecasts to work out an insurance sum in advance. In the long-term, the idea is to create a market for innovative insurance models, particularly aimed at small farmers.