The Insurance Development Forum (IDF), a global public-private partnership that works with governments, insurers and international organisations to strengthen protection against climate and disaster risks, has announced the launch of a parametric agricultural insurance programme in Colombia designed to help thousands of smallholder farmers manage the financial impact of extreme weather.
According to the Insurance Development Forum, five parametric insurance policies have been secured by the Colombian Government, providing protection for 14,402 smallholder farmers across the departments of Sucre, Córdoba, Cundinamarca, Meta and Chocó.
The initiative is expected to benefit as many as 41,600 people within participating farming households and offers up to USD $20.14 million in cover against drought and excessive rainfall.
The cover has been introduced as Colombia prepares for the expected strengthening of El Niño conditions during the latter half of 2026, with the aim of improving financial resilience before severe weather affects agricultural production.
The Insurance Development Forum said the programme has been developed by Colombia’s Ministry of Agriculture and Rural Development (MARD) together with the Fund for the Financing of the Agricultural Sector (FINAGRO), in partnership with the governments of the five participating departments.
Delivery was supported through the Tripartite Agreement Programme, a collaboration involving the Insurance Development Forum, the United Nations Development Programme (UNDP) and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), financed through the InsuResilience Solutions Fund (ISF).
The Insurance Development Forum also said the insurance product was jointly developed by the Ministry alongside a consortium of its members, including Guy Carpenter, Swiss Re, AXA Climate, Munich Re, insurance technology services company Raincoat and Colombian insurer La Previsora S.A. Compañía de Seguros. Funding for the product’s development was provided jointly by the consortium and the InsuResilience Solutions Fund.
Lucy Inés García Montes, Governor of Sucre, Colombia, commented: “Preparing for El Niño means acting before disasters strike. Through this collaboration between the national government, the five participating departments and international partners, we are providing smallholder farmers with the financial protection they need to manage climate risks and protect their livelihoods.”
José Fernando Sánchez, Senior Vice President, Guy Carpenter Colombia, member of the IDF, added: “The IDF industry consortium congratulates Colombia on contracting this product which protects livelihoods, provides food security and strengthens the local insurance market. It is encouraging to see this project deliver much needed protection as a result of the effective public-private collaboration which the IDF champions and the Tripartite Agreement Programme enables.”
The Insurance Development Forum explained that the scheme uses a satellite-based Water Balance Index to monitor weather conditions at municipal level. The index measures rainfall and drought against long-term historical data, with predefined thresholds automatically activating insurance payments when severe weather conditions occur. Because payouts are index-based, there is no requirement for conventional on-site loss assessments, allowing financial support to be distributed more quickly to eligible farmers.
According to the Insurance Development Forum, the policies came into force on 1 August 2026, with first-year premiums jointly funded by the Government of Colombia and the InsuResilience Solutions Fund.
Dr. Annette Detken, Head of InsuResilience Solutions Fund (ISF) added: “This initiative highlights the important role that climate risk insurance can play in protecting smallholder farmers and helping rural communities recover more quickly from drought and excess rainfall. We are proud to support a solution that brings together government, development partners and the insurance sector to strengthen climate resilience in Colombia and create a model that can be expanded across the country.”
The programme represents the first occasion on which Colombia’s departmental governments have adopted parametric insurance as part of their agricultural risk management strategies. By providing rapid financial assistance after major climate events, the model is intended to reduce dependence on emergency funding while creating a framework that can be replicated across other regions of the country.
Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau for Policy and Programme Support, said: “Lasting resilience takes more than innovative finance — it takes strong institutions and the capacity to act. Working with the Government of Colombia, we are helping turn a promising pilot into a scalable climate risk financing solution for agriculture.”
The Insurance Development Forum added that UNDP has worked closely with Colombia’s Ministry of Agriculture and Rural Development and FINAGRO to integrate the new policies into the country’s wider agricultural risk management framework.
Alongside supporting the design and implementation of the programme, UNDP has also helped strengthen institutional capability and establish the conditions needed for parametric insurance to be adopted more broadly by departmental governments across Colombia.
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