Willis and Global Parametrics announce first payout of parametric policy for coffee farmers in Vietnam

Willis, a WTW business, and Global Parametrics have delivered a new parametric solution to coffee farmers in Vietnam, backed by the Natural Disaster Fund (NDF) and in partnership with Bao Minh Insurance Corporation, providing timely relief to coffee growers affected by drought.

The solution was placed in early 2024 and was created to protect a coffee grower’s revenue against a lack of yield due to low rainfall during the critical flowering period.

Today, the pair announced the first ever payout of a parametric policy distributed to coffee farmers in Vietnam who experienced losses as a result of low rainfall in the 2024 coffee growing season.

This innovative approach utilises satellite data to monitor rainfall levels in Vietnam’s coffee-growing regions. If rainfall is insufficient, the insurance is automatically triggered, providing farmers with rapid payouts. This aims to eliminate the need for traditional, often lengthy, claims processes and on-the-ground assessments.

Risk capacity to support the payouts was provided by the NDF, a public-private partnership managed by Global Parametrics, a CelsiusPro Group subsidiary.

The NDF receives funding from the UK government’s Foreign, Commonwealth and Development Office and Germany’s KfW development bank.

Willis secured the parametric coverage with Bao Minh Insurance Corporation in Vietnam in early 2024.

Claire Wilkinson, Managing Director, Alternative Risk Transfer Solutions at Willis, said: “This programme supports the resilience of coffee farmers in Vietnam against the impacts of an increasingly volatile climate, giving them much-needed financial support and allowing them to recover quickly when adverse weather threatens their livelihoods.”

Angus Kirk, Chief Executive of Global Parametrics, commented: “We are delighted that the parametric cover has effectively protected coffee farmers in Vietnam.

“Many of these farmers operate on a small scale with limited financial resources, which constrains their ability to cope with the impact of deviations in rainfall and temperature patterns on their crops. We look forward to continuing our work with our partners in Vietnam.”

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