The Philippine Crop insurance Corporation (PCIC) will work with Pula Advisors AG in implementing the pilot testing of the implementation of area yield index insurance and weather index insurance for rice.
This follows after the state agricultural insurer and the insurance and Switzerland-based technology company signed a Memorandum of Understanding for the implementation of the project.
“We are excited to partner with Pula Advisors in offering index insurance,” PCIC President Jovy Bernabe said. ”Their expertise and experience in implementing insurance solutions will help us innovate the Corporation’s products, making it more suitable to farmers and fisherfolk’ needs.”
Unlike traditional insurance whose indemnity depends on people’s damage assessments, parametric/index insurance payments are triggered by an event exceeding a set threshold, such as when the amount of rainfall in a defined geographic area, or when measured yields are less than the historical threshold.
With this, payout of parametric insurance can be done in a matter of weeks since it relies on objective metrics.
Area Yield Index Insurance covers all major risks that affect yields including windstorm, frost, excessive rainfall, heatwave, hail, flood, drought, pests such as locusts and FAW and diseases.
Weather Index insurance product, on the other hand, is designed around a rainfall index/indices over a specified cover period. Thus, if the rainfall is less than the index at the specified measurement point and over the period specified in the contract, the insurer will pay out under the contract irrespective of the actual losses of the policyholder.
Under the MOU, PCIC will identify the farmers and related projects and send to Pula the necessary information for the dry run. For its part, Pula will act as technical advisor and conduct activities such as the crop cutting exercise and determine the average yield at the end of the season, and the measures to execute the harvest survey form, among others.
Pula proposed that the dry run starts in November 2021, coinciding with the start of the next cropping season.