Swiss Reinsurance Company Limited (Swiss Re) in collaboration with the Government of Heilongjiang Providence, China and the Sunlight Agriculture Mutual Insurance Company of China for a reinsurance protection scheme.
According to Swiss Re, the programme covers 28 poverty stricken countries in Northeast China is the first that the Chinese government establish using commercial insurance programmes to protect farmers against financial risks from natural catastrophes, and it is also the first anti-poverty insurance deal in the country.
In a statement by Swiss Re, the scheme provides financial compensation for harm to lives and property of farming families and covers loss of income after floods, excessive rain, drought and low temperatures for the 28 pilot countries is up to $348 million.
The Chairman, Swiss Re global, Martyn Parker said: This is a real innovation and a groundbreaking success in supporting China to protect against fiscal fluctuation caused by natural disasters.
“It has also set up an excellent example of public private partnership in mitigating natural catastrophe risks with insurance programmes,” he said.
However, the program is the first tailored solution combining a weather index product with a satellite-based flood parametric product, adding that the scheme was designed with advance modeling technology.
It also determines insurance payouts based on triggers from satellite and meteorological data and allows faster payouts than traditional coverage, strengthening the government’s emergency management capability.
The President, Swiss Re for China, John Chen, noted that is one of the top priorities of the government bodies in China to better manage natural catastrophe risks, and it has been the desire of the insurance companies in the market to playa bigger role in this sector.
“We are pleased to bridge the cooperation with an innovative solution and would look forward to replicating the solutions for other provinces in China,” Chen stated.
According to Swiss Re, Heilongjiang is highly exposed to natural disasters. In 2013, the province saw its worst flooding in 30 years, which killed at least 11 people and destroyed more than 2.5 million acres of farmland and affected two million people.