Liberty Mutual Re expands parametric proposition with Colombian agriculture product

Liberty Mutual Re, part of the Liberty Mutual Insurance Group, announced the launch of a parametric agriculture product to financially safeguard Colombian farmers against adverse climatic conditions, in collaboration with XS Latam—part of the XS Global Group—and SFA CEBAR.

The LM Re-developed livestock farming product leverages the expertise of parametric flood platform Floodbase and EarthDaily, which provides advanced geospatial data and analytics to the agriculture sector. It aims to make Colombian farming much more resilient by preventing farmers from losing their land, as so often happens following severe weather-related events.

The product indemnifies farmers against both perils, extending the scope of a successful LM Re drought protection pilot last year. Its solution will allow clients to benefit from highly advanced flood mapping technology, with the product’s innovative trigger mechanisms delivering swift financial relief to affected policyholders.

The product also overcomes one of the main regional issues of frequent cloud cover hampering satellite information, which has rendered previous similar parametric products unsustainable in Columbia, with LM Re able to deliver a basis measure of the index daily.

“With farmers in Colombia routinely relying on annual loans to farm their land, should adverse weather cause a herd loss, many must sell land to repay the loan. This product is designed to mitigate that risk, making farming much more resilient. It also simultaneously reduces the risk banks face in offering finance, creating the potential for cheaper loans, which will further help support resilient farming in Colombia.” – Jean-Christophe Garaix, head of agriculture and parametrics, LM Re.