THE PHILIPPINE Crop Insurance Corp. (PCIC) and German aid agency Deutsche Gesellschaft f眉r Internationale Zusammenarbeit (GIZ) signed a memorandum of agreement to launch a mangrove insurance pilot program in the Eastern Visayas GIZ said.
GIZ said the pilot will introduce a risk-financing mechanism to enable rapid funding for mangrove assessment, cleanup, and restoration after climate-related events, particularly typhoons.
鈥淪trong ecosystems are among the most effective forms of natural protection. Protecting mangroves through insurance helps safeguard coastal livelihoods while reducing recovery costs after disaster,鈥 PCIC President Jovy C. Bernabe said at the signing event on Monday.
The PCIC said local government units (LGUs) will be the policyholders of record. They will pay insurance premiums; their indemnities will go towards mangrove restoration.
The PCIC said insurance payouts will be triggered by predefined parameters, particularly typhoon wind speeds or storm surge levels.
鈥淲e have indices that will serve as proxies for damage 鈥 storm surge wave height, and wind speed. We are looking at 100 kilometers per hour or above (for wind speed),鈥 Israel Q. Dela Cruz, PCIC business development and marketing department manager, said.
The PCIC said the parametric design will hasten indemnity payouts and require fewer administrative costs because it does away with the need for assessments of actual damage.
鈥淲e do not need to send our adjuster to the field. Once the indices are triggered or reported by external data providers, such as the (government weather service), we are going to pay the policyholders,鈥 Mr. Dela Cruz said.
The PCIC said product development will take about two to three months and will be followed by simulations in Northern Samar and Southern Leyte.
Mr. Dela Cruz said the product development phase will include studying the appropriate cost of insurance premiums and indemnity.
鈥淒ata coming from the LGUs will be taken into consideration, including how much they normally incur for mangrove restoration. That will be the baseline for the cost of indemnities,鈥 he said.
The PCIC said it hopes to operationalize the product by year鈥檚 end.
The mangrove insurance pilot program falls under听 the Strengthening Disaster Resilience and Risk Mitigation through Ecosystem-based Planning and Adaptation project, which has been allocated 5.5 million euros by the German government.听
GIZ will provide technical assistance and support the PCIC in developing and operationalizing the insurance product.
鈥淏y piloting mangrove insurance in this region, we demonstrate how nature-based solutions and innovative insurance mechanisms can work together to protect both ecosystems and coastal communities,鈥 according to Nicole Kranz, climate action cluster coordinator at GIZ Philippines and the Pacific Island Countries.
GIZ said the partnership is expected to generate data to support the development of ecosystem-based insurance and other nature-based solutions in vulnerable coastal areas. 鈥 Vonn Andrei E. Villamiel
