Liberty Mutual Reinsurance (LM Re), the reinsurance arm of the insurance group, has launched a new parametric agriculture product designed to protect Colombian farmers against flood and drought risks, two major weather perils that continue to devastate the country’s agricultural sector.The initiative, developed in partnership with XS Latam (part of the XS Global Group) and SFA CEBAR, builds on a drought-focused pilot LM Re ran last year.The product also leverages the expertise of parametric flood specialist Floodbase and geospatial data provider EarthDaily.Liberty Mutual Re has built a diversified presence in parametric and agricultural risk transfer, offering index-based insurance products designed to increase client resilience against natural catastrophes, extreme weather, and non-damage business interruption risks.

The firm’s Agriculture & Parametrics team underwrites a global portfolio that includes hail, multi-peril crop, aquaculture, forestry, and livestock products, available on both treaty and facultative bases.Building on LM Re’s drought protection pilot last year, the new product now covers both floods and droughts.According to the announcement, clients will be able benefit from advanced flood mapping technology, with innovative trigger mechanisms enabling swift financial relief to affected policyholders.

Crucially, the design of the product tackles a long-standing barrier to parametric adoption in Colombia: persistent cloud cover that often renders satellite data unreliable.According to LM Re, the system it has developed enables daily index measurements — a feature designed to enhance the accuracy and sustainability of parametric solutions in a region where persistent cloud cover has historically hindered viability.“With farmers in Colombia routinely relying on annual loans to farm their land, should adverse weather cause a herd loss, many must sell land to repay the loan,” commented Jean-Christophe Garaix, head of agriculture and parametrics, LM Re.

Adding: “This product is designed to mitigate that risk, making farming much more resilient.It also simultaneously reduces the risk banks face in offering finance, creating the potential for cheaper loans, which will further help support resilient farming in Colombia.” Colombia’s agricultural economy is particularly vulnerable to climate extremes, due in part to the country’s varied topography.Flooding in November 2024 affected thousands of farms, while the past decade has seen some of the most severe droughts in the country’s history..

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.