Ecuador has signed its first parametric agricultural insurance policy, benefiting up to 10,000 smallholder farming families growing rice and corn against extreme rainfall and drought risks, marking a major milestone in the Tripartite Agreement program, a public-private partnership between the Insurance Development Forum (IDF), the United Nations Development Program (UNDP) and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF).
Launched in 2023 and led locally by the Ecuadorian Ministry of Agriculture, Livestock and Fisheries (MAGP), the project focuses on developing parametric insurance solutions that trigger automatic payouts when rainfall exceeds predetermined thresholds or drought conditions persist beyond set limits.
The two new products covering extreme rainfall and drought risks were developed by IDF member organizations AXA Climate, Guy Carpenter México Intermediario de Reaseguro SA de CV and Blue Marble in collaboration with MAGP, with local insurance company Hispana de Seguros acting as local policy implementer.
“The parametric policy is now in effect and is designed to provide faster and more transparent insurance payouts to help farming households recover quickly from climate events and reinvest in subsequent planting cycles,” the IDF explained.
Product placement is supported by premium financing from ISF during the initial coverage period.
According to reports, 2,511 smallholder rice and yellow corn producers in the climate-vulnerable provinces of Guayas, Los Rios, Manahui and Loja are covered in the first planting cycle (January to May 2026), of whom 44% are female smallholders and 15% are young people under the age of 29.
Taking into account different climatic conditions, it is expected that at least 300 more producers will be covered in the second cycle (July to November 2026).
Juan Carlos Vega, Ecuador’s Minister of Agriculture, Livestock and Fisheries, commented on the news: “These parametric insurance policies are in line with our commitment to provide small farmers with tools to enhance their sustainability, especially in the face of the growing challenge of climate change. It is a tool that protects them economically from climate risks and contributes to our country’s food sovereignty.”
Dr Katharina Stasch, Director General for Multilateral Development Policy; Transformation; Climate, Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) said: “As climate risks continue to rise, cooperation between governments, insurance and development partners is more important than ever.
“Ecuador’s landmark insurance policy is an example of how countries can unlock resilience through insurance and risk management, creating a win-win in that small farmers are protected, local insurance markets are strengthened, and the country’s agricultural sector is resilient to risk.”
Dr. Nerea Vadillo, AXA Climate Public Sector Technical Lead/IDF Ecuador Program Co-Lead, noted: “Through the Tripartite Agreement program, IDF members are helping to deliver a solution that protects today’s vulnerable local farmers while strengthening Ecuador’s long-term financial resilience to climate risks.
“This is what building a nation for the future looks like: scalable, nation-led solutions that enable faster recovery, informed decision-making and greater resilience for those most vulnerable to climate shocks.”
Marcos Neto, United Nations Assistant Secretary-General and Director of the Bureau for Policy and Program Support at UNDP, added: “This milestone in Ecuador demonstrates how insurance can be used as a powerful tool for inclusive and climate-resilient development. As countries face growing climate threats, Ecuador’s model offers governments a scalable and sustainable pathway to protect smallholder farmers and their vital contribution to economies and food security.”
Dr Annette Detken, Director of InsuResilience Solutions Fund (ISF), said: “This innovative public-private partnership demonstrates how government leadership, industry expertise and development finance can come together to build scalable solutions for the most vulnerable.
“With these two groundbreaking policies in place, financial resources can flow quickly and predictably to farmers when droughts and floods occur, helping to protect lives and livelihoods.”
“This insurance not only protects crops, but also the dreams and hard work of thousands of rural families who feed this country,” said Yinca Matila, UNDP Representative in Ecuador. “We are sowing trust to harvest resilience.”
