WTW has announced the launch of Asia’s first four-peril parametric insurance solution to protect Sri Lanka’s shrimp fans against weather risks, signalling a turning point for aquaculture development across the region.
Designed and placed for the Taprobane Seafood Group, the parametric solution secured US$15 million in project financing from FMO, an entrepreneurial development bank based in the Netherlands. With the aim of safeguarding Taprobane, Sri Lanka’s largest seafood company, against vulnerabilities and other potential bottlenecks, WTW structured the region’s first four-peril parametric solution that covers four key weather risks: earthquakes, typhoons, excess rainfall, and heat stress.
With the solution in place, Taprobane can secure a loan to develop sustainable shrimp farming and provide gainful employment to local, vulnerable communities. WTW global head of alternative risk transfer solutions Marc Paasch said that the growing susceptibility of food industries to natural catastrophes mean that the global supply could suffer adverse impact, affecting entire societies.
“This signifies an urgent need for innovative insurance and financing tools to better protect businesses,” Paasch said. “Our 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 will also use the FMO funding to rehabilitate abandoned farms owned by the firm and by other third-party growers, in addition to investing in new farms, circular tanks, hatcheries, and a new processing facility. WTW Asia head of alternative risk transfer solutions Richard Zhang said that the insurer has demonstrated the industry’s role in ensuring companies like Taprobane can secure the necessary funding through innovative risk analytics and bespoke parametric solutions.
“This will open the door for more sustainable seafood farming and mitigate the effects and impacts caused by climate change, which has been a challenge increasingly faced by local farms in Asia. Our unique solution will be critical to unlock the growth of aquaculture and meet the increasing food demand in the region,” Zhang said.
Recently, the global insurer also announced that it will integrate climate data into its broking property renewals, a move that aims to help clients assess their long-term risks associated with their property portfolios and develop effective risk management strategies.
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