Drought parametric insurance
Pays out when rainfall or soil moisture stays below normal through the growing season, without waiting for the harvest losses to be counted.
Index, trigger and payout
Payout
How the cover works
What is measured, and when it pays.
- Risk covered
- Sustained precipitation / soil-moisture deficit vs. climatological normal over the growing season.
- Parametric trigger
- SPI and/or soil-moisture anomaly, rolling 30/60/90-day window.
- Payout
- Predefined payout compensating the loss, sized on an 11-tier trigger scale.
- Index resolution
- Grid cell, monthly
- Data and model
- SPI ~ Normal(0,1) by construction (McKee et al. 1993).
- Typically for
- Farms, cooperatives & agri-lenders
Bought by the same clients
Related covers.
Next step
Test the trigger on your own location.
We back-test the index at your site over its full history and come back with indicative terms, before anything is bound.