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Weather Index-Based Parametric Insurance for Small-Scale Fishers – Rare and WTW

Weather Index-Based Parametric Insurance for Small-Scale Fishers

Project Leads: Rare and WTW
Financial Support: The UK’s Blue Planet Fund and the Government of Canada
Location: Philippines


ORRAA partners Rare and WTW are piloting a parametric insurance solution for fishers in the Philippines to combat income losses from prolonged periods of adverse weather which prevent safe fishing. This first of a kind coverage combines three weather parameters (wind speed, wave height, and rainfall) into an index that is triggered after an aggregate number of lost fishing days. The coverage is an affordable, scalable product that provides payments directly to fishers when the policy is triggered. Fishers must formally register and commit to sustainable fishing practices to benefit from this insurance protection.


In the Philippines, 6.5 million people rely on local fisheries for income and sustenance, with fish and fish products making up 11.5 per cent of the average Filipino diet. Climate change is making it more difficult for fishers to safely access fishing grounds. High winds, agitated sea states, and heavy rain, which reduces visibility, all negatively impact the activities of small-scale fishers who use smaller vessels and navigate using visual cues. Seasonal winds and rains are also becoming increasingly unpredictable due to climate change. Ultimately, fishers suffer significant income losses when they are unable to work for a prolonged period due to adverse weather conditions.


To combat these losses, support resilient communities, and manage risks in the face of climate change, ORRAA partners Rare and WTW are developing an index as a proxy for the aggregate number of lost fishing days each month to inform development of a commercially viable insurance product. The feasibility study and corresponding actuarial analysis to demonstrate the technical viability of combining three identified weather parameters into a single insurance product has been completed. The product, intended to be both affordable and scalable, will be piloted in the Philippines providing payments to fishers in local currency when the policy is triggered. The Government of the Philippines will be the policyholder and provide coverage to fishers as a benefit of vessel registration and a commitment to implement sustainable fishing practices.

Scalability and Next Steps

At COP27, on Wednesday 16 November 2022, the Government of Canada announced additional support to this project over the next two years. In 2023-24, the pilot aims to test the product with an estimated 50,000 fishers across 75-90 coastal municipalities as proof of concept. The maximum anticipated pay-out will be up to USD$100 per policy cycle equivalent to a month of lost wages. If it proves successful, Rare will work with the Government of the Philippines to expand the coverage nationally as a set benefit for fisher registration.