Global reinsurer Swiss Re is introducing business interruption coverage in case of cholera outbreaks for women entrepreneurs in Haiti.
Swiss Re, together with Mercy Corps and Fonkoze, the largest microfinance organization in Haiti, are introducing a new cholera insurance program. The coverage ensures rapid payout once a pre-defined set of criteria are met. These include cholera-related hospital admissions and observable weather factors linked to cholera outbreaks. Cholera first appeared in Haiti after the heavy rains in the fall of 2010.
These parametric policies use a specially developed index to closely mirror actual local situations. They are efficient since they can provide funds even while policy holders wait for medical checkups or other assessments. The scheme is expected to make cholera covers available to Fonkoze’s women borrowers (which currently number 50,000) and their families, and be fully implemented by 2013.
The cholera insurance program builds on the group’s existing product in Haiti, a natural catastrophe microinsurance cover launched in early 2011 and that provides protection to Fonkoze’s women clients against loss of livelihood caused by earthquakes, floods and hurricanes.
Some 4,000 women who lost their homes or business assets in the floods earlier this year have already received $1 million in payment, according to Swiss Re. The reinsurer says it expects this cholera policy will be similarly effective in ensuring that the infection of an income provider does not result in destitution for the entire family. The index Swiss Re is developing for programs in Haiti can potentially be applied to other infectious diseases in other parts of the world, the company said.
In Senegal, Paying Premium With Labor
Additionally, Swiss Re is working with Oxfam America, the World Food Programme (WFP) and WFP sponsor USAID, to introduce to farmers in Senegal what it calls an “insurance for work” program. The project makes insurance affordable to poorest members of a community — by giving them the option to pay for their premiums with their labor. This insurance-for-work program will engage farmers in local irrigation and forestry projects intended to reduce the impact of climate change on their villages.
Swiss Re will lead the design and implementation of risk transfer solutions that will help Senegalese farmers cover their vulnerability to changes in climate. The reinsurer will contribute $1.25 million over five years to the implementation of the initiative. Known as the R4 Rural Resilience initiative, the Senegal project is an extension of a successful pilot in Ethiopia by Swiss Re, Oxfam America and other partners which will be expanded to other countries over time.
The program currently brings insurance coverage to 13,000 African households, up from 200 households when it was launched in 2009. Swiss Re intends to add 18,000 in Senegal by 2016. Of these, 15,000 are expected to pay for their insurance through labor and 3,000 by cash.
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