『Providing Weather Index Insurance/Products』 links to SDGs Goal 1, 2, 8, 13, and 17

#SDGAction42988

Description

Intro

<Our practice> 
Sompo Holdings provides a weather index insurance aimed at reducing agricultural business risk in Southeast Asian countries, where agriculture is a key industry that is also vulnerable to climate change. 
 
<Background> 
The intensification of natural disasters by climate change can impact our group’s ability to continue providing insurance sustainably, as it causes insurance payments to rise, and with them, insurance premiums. At the same time, as a group dedicated to providing “security, health, and wellbeing of customers” we also see business opportunities in the growing need for products and services to address these risks.

Objective of the practice

<Objective of the practice> 
Sompo Holdings aims to create and expand new markets by offering insurance products and consulting services that cover the risks of weather disasters and renewable energy businesses. We are striving to be leaders in reducing environmental impacts throughout the value chain in collaboration with stakeholders. We have also been working to develop products and services that help reduce the risks and impacts of climate change and disasters, build low-carbon economies, conserve biodiversity, and promote environmentally conscious behavior. Through continued efforts to provide innovative products and services and create partnerships that help reduce impacts, we will contribute to a more resilient and sustainable society. 
 
<Distinguishing features> 
"Weather index insurance" is an insurance product that pays out a contractually predetermined insurance amount when a weather index — such as for temperature, wind speed, or rainfall fulfills certain conditions. Using Sompo Risk Management, group's risk consulting company, expertise, we provide a weather index insurance aimed at reducing agricultural business risk in Southeast Asian countries, where agriculture is a key industry that is also vulnerable to climate change. 
 
<Interlinkages of SDGs and targets> 
Providing this product, 
we contribute to SDGs target 1.5 "Build the resilience of the poor & the vulnerable," 2.4 "Ensure sustainable food system," 8.10 "Strengthen the capacity of domestic finance institutions to encourage and expand access to banking, insurance and financial services for all," and 13.1 "Strengthen resilience to climate-related hazards & natural disasters."

Partners

The key factor of our success practice is Partnership with below institutions as well as Multi-Stakeholder Dialogue including local small scale farmers.

Implementation of the Project/Activity

<Implementation of the project>
Sompo Japan Nipopnkoa Insurance, group's core P&C insurance company, began providing weather index insurance in Northeast Thailand in 2010 to alleviate the losses borne by rice farmers when their crops were damaged by drought. Cooperating with the Thai Bank for Agriculture and Agricultural Cooperatives (BAAC), the company developed a scheme for farmers who have loan contracts with BAAC to easily participate in an insurance program, and has been steadily expanding the program’s geographical reach.
In Myanmar, the company developed a weather index insurance that covers drought risk for rice and sesame farmers in the central arid region.
This insurance, developed in partnership with the Remote Sensing Technology Center of Japan (RESTEC), makes use of rainfall data obtained by earth observation satellites.
In the Philippines, the company offered Typhoon Guard Insurance which pays out a predetermined insurance amount to agricultural producers if the center of a typhoon passes through a specified area. The company also developed a weather index insurance in Indonesia with assistance from the Japan International Cooperation Agency (JICA).
In recognition of these achievements, Sompo Holdings has been approved as a member of the Business Call to Action (BCtA) alliance led by the United Nations Development Programme (UNDP), which challenges private companies to develop business models that can achieve both commercial success and sustainable development.
We are utilizing BCtA program as a part of our monitoring mechanism.

Results/Outputs/Impacts

Under BCtA monitoring system, we aimed to provide weather index insurance to 30,000 farmers in Thailand and other Southeast Asian countries by 2025. As to this target, we may amend the target taking into consideration the fact that our foreign business is expanding in recent years.

As external recognition, in 2016, Sompo Japan Nipponkoa Insurance received Japan’s Environment Minister’s Award for demonstrating the Principles for Financial Action towards a Sustainable Society. For our initiative in Myanmar we received the Japan's Minister of State for Space Policy Prize, at the Second Space Development and Utilization Grand Prize presentation.

Enabling factors and constraints

As we illustrated in "Implementation of the Project/Activity," we made close partnerships with BAAC, RESTEC, and JICA, which enabled us to provide weather index insurance for local small scale farmers in Southeast Asian counties. Through these partnership, we have been conducting continuous investigation in Southeast Asia.

Sustainability and replicability

In 2017, Sompo International Holdings, a global specialty provider of commercial P&C insurance and reinsurance, announced setting of AgriSompo, an integrated platform to provide agricultural insurance across the globe. AgriSompo delivers a unified underwriting approach with shared expertise and technology across a range of products to farmers, agricultural insurers and a wide variety of other agri-businesses.

In February 2019, AgriSompo starts to offer “Longan parametric weather insurance program” in Thailand. As illustrated, SOMPO Thailand has cooperated with BAAC to provide a parametric weather insurance program for rice farmers in North-Eastern Thailand since 2010. Currently, Longan, the major agricultural export crop for the country, has been exposed to drought risk. The Thai government has been investigating way to launch an efficient financial support program including utilization of insurance to enable stable growth for farmers.

This new product is introduced under the direction of AgriSompo, Sompo International’s integrated platform to assist farmers, ranchers, farm suppliers, agriculture insurers and a wide variety of other agribusinesses worldwide in managing their risks. AgriSompo offers a range of insurance, reinsurance and weather derivative products across North America, Europe, and Australia, and is expanding into key South American and Asian agriculture markets.

Conclusions

Again, the key factor of our practice is Partnership as well as Multi-Stakeholder Dialogue including local small scale farmers. We will continue to contribute to climate change adaptation and mitigation by working through our value chain and providing new solutions.

Other sources of information

Official website of Sompo Holdings: https://www.sompo-hd.com/en/csr/value/topic3/
About AgriSompo: https://www.sompo-intl.com/sites/default/files//files/SI%20AgriSompo%20…
News Release (Launch of "Longan parametric weather insurance program" in Thailand): https://www.sompo-intl.com/sites/default/files//pr_docs/Sompo%20Thailan…
BCtA (Sompo Holdings): https://www.businesscalltoaction.org/member/sompo-japan-nipponkoa-group

SDGS & Targets