New Protection Against Climate Risks

Willis, a WTW business, and Global Parametrics, a CelsiusPro Group company, have launched a parametric insurance solution to help coffee farmers in Vietnam manage losses caused by low rainfall. This initiative aims to provide financial stability to farmers facing unpredictable weather conditions.

In early 2024, a partnership with Bao Minh Insurance Corporation introduced the insurance plan. It aims to protect coffee farmers from revenue losses due to insufficient rainfall during the flowering period, a critical phase for crop development.

How the Insurance Works

The parametric insurance model relies on satellite data to track rainfall levels across Vietnam’s coffee-growing regions. If rainfall drops below a predefined threshold, farmers receive compensation without needing a lengthy claims process. This ensures quick financial relief, helping farmers recover from poor harvests faster.

Global Parametrics manages the Natural Disaster Fund (NDF), which provides the financial backing for these payouts. The NDF is a public-private partnership supported by the UK’s Foreign, Commonwealth and Development Office and Germany’s KfW development bank.

A Collaborative Effort to Secure Farmers’ Livelihoods

This initiative is part of the De-Risk South East Asia project, a program focused on building climate resilience in the region. It is a joint effort involving Willis, Global Parametrics, ECOM Agroindustrial Corp, Bao Minh Insurance Corporation, and the University of Southern Queensland in Australia.

Angus Kirk, CEO of Global Parametrics, emphasized the importance of this insurance for small-scale farmers with limited financial resources. He highlighted that unpredictable rainfall and temperature fluctuations pose serious risks to their livelihoods.

Claire Wilkinson is Managing Director of Alternative Risk Transfer Solutions at Willis He stated that the program provides much-needed financial protection to coffee farmers in Vietnam, helping them withstand the increasing challenges of climate change.

Willis Towers Watson’s Financial Performance

While Willis Towers Watson reported strong earnings in the fourth quarter of 2024, with net income reaching $1.25 billion, its full-year performance showed a net loss of $88 million, compared to a $1.1 billion net income in 2023.

Conclusion: A Step Toward Climate Resilience

With Vietnam being one of the world’s largest coffee producers, climate volatility remains a serious threat to farmers. This parametric insurance solution offers a safety net against extreme weather. By ensuring farmers can continue their operations without devastating financial losses. Through strategic partnerships and innovative risk transfer solutions, Willis and Global Parametrics are helping to create a more resilient coffee industry in Vietnam.

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