El Salvador’s only insurance cooperative and ICMIF member, Seguros Futuro, has launched an insurance product that will protect clients from catastrophic events. The product has been launched in partnership with the Banco de Fomento Agropecuario (Agricultural Development Bank) and with the support of reinsurance provider MiCRO (The Microinsurance Catastrophe Risk Organisation).
Seguros Futuro launched the new parametric insurance cover "Produce Seguro" to provide cover for small businesses and low-income families against natural disasters. Agriculture and the small business sector is critical to many South America economies and is exceedingly susceptible to weather-related events. This new product will cover business interruption losses from excessive rainfall, severe drought and earthquakes.
The catastrophic risk policy is triggered automatically by predetermined events that are verified by objective data sources, including NASA satellites. The stronger the event, the greater the pay-out to the beneficiaries will be. Policyholders will also receive disaster risk reduction training through national coordinating bodies.
The agriculture and small business sector is critical to many Central American economies which are exceedingly susceptible to weather-related events. Climate change is a threat multiplier for many such events, increasing both their intensity and frequency. Before this product, there were no index-based, catastrophic risk insurance policies specifically for low-income individuals in El Salvador.
Produce Seguro is an accessible product in terms of price, which will be sponsored by the BFA, which is a great benefit for customers.
A spokesperson for Seguros Futuro said: “We are pleased to have this new insurance for the protection of producers in our country and to at the forefront with this unique coverage in the insurance market”.
Carlos Boelsterli, Chief Executive Officer for MiCRO, commented, “After having launched a similar product in Guatemala last year, this product launch in El Salvador shows that MiCRO’s solution, the first one offering protection against natural disasters to those who need it most, is replicable, a critical factor to scale up and be able to offer this innovative product sustainably.” Boelsterli has previously spoken at the Annual Meeting of the Latin American Association for Reinsurance Education.
Seguros Futuro’s General Manager, Daysi Rosales Beltrán, will present a case study on the new product during the ICMIF/Americas Conference later this year.
Photo shows: Representatives from the three organisations seated at the launch event
Left - Nelson Gilberto Alfaro, President, Seguros Futuro
Middle – representative of Banco de Fomento Agropecuario
Right - Carlos Boelsterli, Chief Executive Officer, MiCRO