Understand the protection need
Map whose income, assets or essential spending are exposed, when the shortfall occurs and how households or businesses currently cope. Use existing programme evidence and identify what still needs investigation.
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Climate, parametric protection & climate finance
A climate shock.
A financial consequence.
For NGOs, foundations, development institutions and public agencies designing protection around climate exposure, disrupted incomes and livelihoods.
Start with the people
What stops working
when the weather changes?
A farmer loses a season. A street vendor loses trading days. An SHG member struggles to keep a business and loan repayment going. Different losses call for different designs.
Compare the options
Assess where insurance may help, where reserves or grants may be more suitable and what risk-reduction measures belong alongside financial protection.
Design the delivery
Work through eligibility, enrolment, customer explanation, payment flows, complaints and partner responsibilities. A trigger is only one part of a programme.
Parametric protection
A clear trigger.
An honest trade-off.
Parametric insurance links payment to a pre-agreed event or index threshold. It does not simply reimburse each customer’s assessed loss.
The important design question is the mismatch: a person can suffer a loss without the trigger being met, or receive a payout that does not match their loss. That is basis risk.
We help frame the protection problem, assess product-design options and specify the data, trigger and delivery questions that need insurer and specialist validation.
01 / EXPOSURE
Whose loss?
People, place, livelihood and timing.
02 / TRIGGER
Which signal?
Data source, threshold and verification.
03 / PAYMENT
Enough, when?
Benefit amount, recipient and route.
04 / GAP
Who is missed?
Basis risk, communication and response.
Background: UNDP on parametric insurance. This is a design framework, not a claim of a deployed programme.
Climate-finance context
What should the funding
actually pay for?
Insurance is one part of climate and disaster-risk finance. A programme also needs to consider adaptation, operating costs, affordability and what remains after a grant ends.
Separate the funding needs
Distinguish risk reduction, programme setup, premium support, retained losses and response funding. Avoid asking one insurance instrument to do every job.
Make the programme investable in detail
Prepare the problem statement, protection options, partner roles, budget assumptions and learning questions for funder and implementing-partner discussions.
Plan beyond the pilot
Consider renewal affordability, subsidy dependence, ownership and the evidence needed for a continuation decision. We support programme design; we do not promise access to capital or funding approval.
What you can commission
A programme brief.
A pilot worth testing.
01
Protection-needs and stakeholder map, including women and underserved livelihood groups.
02
Parametric/indemnity option assessment and data, trigger and basis-risk questions.
03
Programme and partner brief, funding assumptions and operational design.
04
Pilot scope, monitoring questions and criteria for adaptation or continuation.
Actuarial pricing, hazard modelling, underwriting capacity and legal requirements need the appropriate insurer and specialist inputs. Responsibilities are agreed at scoping.
Illustrative brief · not completed work
Heat affects earnings.
Who needs support first?
A foundation considering protection for outdoor workers might start with work patterns, income interruption and existing support. Before selecting a temperature trigger, examine local data, the relationship to lost work and the people the trigger could miss. Then test enrolment, communication and payment arrangements.
Further context: World Bank: disaster risk finance and insurance. Different funding tools can address different layers of risk.
Community & field research
Start with lived exposure.
Then consider the trigger.
We undertake research with communities, livelihood groups and programme stakeholders to understand disruption, coping strategies and delivery realities. Use those findings alongside climate and product evidence when assessing protection options.
Explore research & field researchStart a conversation
Bring the programme.
Let’s work through the protection.
Bring the question on your desk. We’ll help turn it into a clear brief, useful outputs and an agreed scope.
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