Typhoon inusrance in the Philippines
In what we believe to be a world first, MicroEnsure has designed
a weather index crop insurance product to protect smallholder rice
farmers against typhoon damage in the Philippines. An average of 24
to 28 typhoons hit every year, threatening the livelihoods of
thousands of farmers by both blowing down crops and drowning them.
We would like to thank Deloitte and Touche Actuarial Services (UK)
<link here> for their help in creating a truly innovative
product that protects farmers from a very real peril.
Using data publicly available from the Japanese Meteorological
Association, we have developed an index that can be used to
generate payout information for insured farmers whose farms were in
the path of a typhoon. Farms covered by the insurance need to be
within two kilometres from a known GPS location. All typhoons are
tracked by satellite to check their exact path and wind speed.
Automatic payouts to farmers are triggered if they are within 180
kilometres of the typhoon's path and the wind speed is sufficiently
strong, so there is no need for expensive loss assessment at the
farm. Actual payouts will depend on just how close the farm is to
the centre of the path and the wind strength at the location.