It’s an interesting approach for dealing with the aftermath of extreme weather events;
The Dominican Republic has become the first country in Latin America and the Caribbean to integrate parametric insurance into its adaptive social protection system; providing rapid financial support to households when extreme rainfall or wind events occur.
The insurance solution was developed through the Tripartite Agreement — a public-private partnership between the Insurance Development Forum (IDF), the United Nations Development Programme (UNDP), and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF) — and will initially cover 3,030 climate-vulnerable households enrolled in the Supérate conditional cash transfers programme in Santo Domingo Norte and Puerto Plata.
Mayra Jiménez, Director General, (DDSS) of the Dominican Republic presented the innovative solution at an event hosted by Supérate in Santo Domingo on June 9th, saying: “This insurance provides an additional layer of protection for households that are most exposed to the impacts of climate-related events. Its value lies in the speed and timeliness with which the State’s response can be translated into tangible support when families need it most.”
The policy was activated June 15th and was announced today at the Hamburg Sustainability Conference (HSC). Speaking at HSC, Ivana Živković, UN Assistant Secretary-General and Director of the UNDP Regional Bureau for Europe and the Commonwealth of Independent States, said: “Protecting people when climate disasters strike is at the heart of this initiative. By building insurance into the Supérate social protection programme, the Dominican Republic has combined innovation, financial protection and social inclusion to help vulnerable households recover faster from climate shocks. The Dominican Republic’s approach offers a scalable model that can help shape the future of climate resilience around the world.”
The insurance product provides financial protection against climate-related hazards through a parametric mechanism that automatically triggers payouts when predefined thresholds for excessive rainfall or strong winds are reached. Payouts are based on independently verified satellite and meteorological data rather than post-disaster damage assessments, enabling affected households to receive support more quickly when they need it most.
Birgit Pickel, Director-General for Sustainable Development and Climate at Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), said: “Climate resilience requires systems that can anticipate and manage risks before disasters occur. The Dominican Republic is demonstrating how partnerships between governments, development institutions and the private sector can build these systems and strengthen resilience where it matters most — among vulnerable households.”
Implemented by the Dirección de Desarrollo Social Supérate (DDSS), UNDP and the IDF, the initiative brings together public, private and development sector expertise. The insurance product was designed by an IDF consortium comprising Guy Carpenter Mexico, AXA Climate, Blue Marble, and CelsiusPro, and local insurer Seguros Reservas, co-financed by the IDF consortium members and the InsuResilience Solutions Fund (ISF).
The initial phase of this novel parametric insurance model represents an important step towards an adaptive and anticipatory social protection system. By combining smart public policy, innovative finance, and strategic partnerships, the initiative offers a practical model for strengthening resilience and protecting vulnerable households in the face of increasing climate risks.
“This step by the Dominican Republic demonstrates how countries can harness the capabilities of the insurance industry to strengthen preparedness ahead of disasters – protecting lives, safeguarding fiscal stability, and supporting long-term development objectives. By leveraging innovative insurance solutions and advanced technology, the product delivers financial protection tailored to the country’s needs,” indicated Ivo Menzinger, Chair of the IDF Operating Committee.
Dr. Annette Detken, Head of the InsuResilience Solutions Fund, said: “This initiative highlights the important role that innovative insurance solutions can play in strengthening social protection systems and helping vulnerable households recover more quickly from climate-related shocks. We are proud to support a solution that demonstrates how greater resilience can be enhanced at scale in the Dominican Republic and beyond.”
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