July 17, 2023

 

WTW launches Asia's first four-peril parametric insurance solution for Sri Lanka's shrimp industry

Insurance and risk management firm WTW has unveiled a four-peril parametric insurance solution for Sri Lanka's shrimp farmers, marking a significant milestone for aquaculture development in the region, Insurance Business reported.

 

The innovative solution, designed in collaboration with the Taprobane Seafood Group, has secured US$15 million in project financing from FMO, a Dutch entrepreneurial development bank. Its primary objective is to safeguard Taprobane, the largest seafood company in Sri Lanka, against weather-related risks and potential disruptions.

 

The four-peril parametric solution developed by WTW covers key weather risks, including earthquakes, typhoons, excess rainfall, and heat stress. With this insurance in place, Taprobane can obtain the necessary loan to support sustainable shrimp farming initiatives, creating employment opportunities for local communities that are vulnerable to climate risks.

 

Marc Paasch, WTW's global head of alternative risk transfer solutions, said that the growing vulnerability of the food industry to natural catastrophes and the potential adverse impacts on global supply chains.

 

He said WTW's new four-peril parametric insurance provides an efficient and simplified solution to support businesses vulnerable to multiple weather events that are not covered by traditional insurance products in the market.

 

Taprobane plans to use the funding from FMO to rehabilitate abandoned farms, both owned by the company and third-party growers, as well as invest in new farms, circular tanks, hatcheries, and a state-of-the-art processing facility.

 

Richard Zhang, WTW's Asia head of alternative risk transfer solutions, said that the insurer aims to facilitate funding for companies like Taprobane through innovative risk analytics and tailored parametric solutions.

 

Zhang expressed the importance of the solution in promoting sustainable seafood farming and mitigating the effects of climate change, which pose increasing challenges to local farms in Asia.

 

WTW recently announced its integration of climate data into property renewals, enabling clients to assess long-term risks associated with their property portfolios and develop effective risk management strategies.

 

-      Insurance Business