Weather Risk Management Services (WRMS) and the UN World Food Programme (WFP) have introduced Iraq's inaugural parametric insurance pilot schemes to shield smallholder farmers and micro-entrepreneurs from climate change-induced risks.
Iraq's susceptibility to climate-related challenges, including droughts, heatwaves, and erratic rainfall, has historically hampered agricultural productivity.
This initiative aims to support losses stemming from extreme weather events such as heatwaves and droughts, bolstering the resilience of vulnerable communities.
Traditional insurance models often exclude smallholder farmers due to complex claims processes and prohibitive costs.
To counter this, WRMS and WFP have implemented a parametric insurance model that automates payouts based on predefined weather conditions, eliminating the need for traditional claims filing and expediting financial support.
The pilot projects are underway in al-Hamdaniya, al-Mosul, Tilkaef, and Kerbela districts, encompassing 400 smallholder farmers under drought insurance and an additional 400 farmers and micro-entrepreneurs under heatwave insurance.
Drought insurance coverage spans December 2024 to May 2025, while heatwave insurance is scheduled between July and September 2025. The total sum insured for both drought and heatwave coverage amounts to 700,000 Iraqi dinar (US$540).
The National Insurance Company of Iraq (Asia Gate Insurance Company) underwrites these policies, with WRMS serving as the technical agent responsible for monitoring weather indices and triggering payouts accordingly.
Anuj Kumbhat, co-founder and CEO of WRMS, states: “Our partnership with WFP in Iraq is a transformative step in financial inclusion and climate resilience. Using parametric insurance, we guarantee that smallholder farmers and micro-entrepreneurs get a share of immediate and transparent financial assistance, which enables them to cope with climate shocks.
“We are hoping to be able to scale up this effort and bring its benefits to greater at-risk populations.”
