Six countries to explore creating agricultural risk finance facility for Southeast Asia

By Henry Gale

Feb 25 - (The Insurer) - Six countries have partnered with the Southeast Asia Disaster Risk Insurance Facility (Seadrif) and the United Nations Food and Agriculture Organization (FAO) to explore the development of a regional agriculture risk pool.

Seadrif and FAO will conduct a pre-feasibility assessment for the facility in the coming months, with financial support from the Green Climate Fund, a U.N. initiative that provides backing for climate finance programmes. This will include working with the countries to align on the scheme's objectives and assessing implementation arrangements and funding requirements.

Southeast Asian countries face common challenges in expanding protection for the agricultural sector against climate shocks, Seadrif said. Regional collaboration and risk pooling could reduce reinsurance premiums, it continued, while the new facility would also facilitate the sharing of experience and technical expertise.

The agreement was made on the sidelines of an event hosted by the Association of Southeast Asian Nations (ASEAN) Climate Resilience Network in late January. Seadrif did not name the six countries involved in the partnership except for saying they are part of ASEAN, a group of 10 countries in the region.

The proposed facility would be housed within Seadrif, which is the region's disaster risk pool. Seadrif offers parametric catastrophe insurance to governments of ASEAN member countries. Laos, its only current policyholder, received a $3 million payout on its flood policy last September following heavy rainfall from Typhoon Yagi.