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Colombia contracts parametric farm insurance to cover drought and excess rain
The five policies are set to cover 14,402 smallholder farmers, offering up to $20.14 million in protection and automatic payouts based on a satellite Water Balance Index.
Colombia has contracted five parametric agricultural insurance policies for smallholder farmers, aiming to protect against both drought and excess rainfall. The coverage, built using a solution developed by the Insurance Development Forum (IDF), UNDP, and Germany’s BMZ through the InsuResilience Solutions Fund (ISF), is delivered under a public-private Tripartite Agreement.
According to Artemis, the policies will directly cover 14,402 smallholder farmers, reaching up to 41,600 people across their households in five departments: Sucre, Córdoba, Cundinamarca, Meta and Chocó. The initiative provides up to US$20.14 million in coverage, and it is scheduled to take effect as Colombia prepares for intensifying El Niño effects in the second half of 2026.
The program is led by Colombia’s Ministry of Agriculture and Rural Development (MARD) and the Fund for the Financing of the Agricultural Sector (FINAGRO), working with the governments of the five regional departments. The parametric product was issued on August 1, 2026, with the first-year premium co-financed by the Government of Colombia and ISF.
Artemis also reports that payouts are triggered automatically when satellite-derived thresholds are exceeded, based on a Water Balance Index at the municipal level. The index is compared against historical data to identify severe drought or excess rainfall, and the approach is intended to reduce reliance on traditional post-disaster loss assessments while enabling faster financial support.