Singapore-based insurtech Igloo has announced the expansion of its weather index insurance product to Vietnam coffee farmers following its initial success with rice farmers in the country.
The parametric index insurance collects and monitors rainfall data to calculate claims using pre-assigned values for losses due to natural causes. In effect, this also eliminates the need to individually verify claims, which in turn reduces transaction costs and enables faster payouts to farmers. As it is hosted on a public blockchain, payouts are claimed to be transparent, consistent, and unbiased.
In a news release, Igloo said that coffee harvests are under the threat of climate hazards, with global supply to possibly see a reduction of half by 2050 due to ecological events. Vietnam produces nearly 30.4 million bags of coffee per year, which makes it responsible for most of the global coffee output.
The weather index insurance is available to farmers in the five Central Highlands provinces of Kon Tum, Gia Lai, Dak Lak, Dak Nong, and Lam Dong, and established in partnership with PVI Insurance, Vietnam Meteorological and Hydrological Administration (VNMHA), Saigon Hanoi Insurance Corporation (BSH), and reinsurer SCOR. It’s priced at US$42 per hectare and provides coverage of up to US$1,700 per hectare, with a minimum coverage area of 0.1 hectares.
Igloo co-founder and CEO Raunak Mehta said that the policy was very successful when it launched for rice farmers last year, and this expansion for the coffee industry is part of the firm’s commitment to protect more agricultural communities across the region.
“Farmers all over the world are suffering from the enormous impacts of climate change, which adversely affect their livelihood. We need to collectively invest more time and effort to protect them against unforeseen climate hazards. The blockchain-based weather index insurance affirms our commitment to providing products with affordable prices and diverse coverage, and utilizing technology in the most efficient way,” Mehta said.
Elsewhere in the insurance sector in the country, global firm WTW has appointed My Thien Nguyen as new country leader for Vietnam.
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