Filed Under:Claims, Catastrophe & Restoration

First MiCRO natural catastrophe business interruption coverage launched in Guatemala

One way to provide insurance for some of the world's most vulnerable populations

Insurance companies like Swiss Re are looking for ways to provide micro-insurance to small businesses, like this bakery, in countries that are likely to be hard hit by natural disasters, such as Guatemala.  (Photo: Jorge Barrientos, MiCRO)
Insurance companies like Swiss Re are looking for ways to provide micro-insurance to small businesses, like this bakery, in countries that are likely to be hard hit by natural disasters, such as Guatemala. (Photo: Jorge Barrientos, MiCRO)

Guatemala is highly exposed to natural disasters.

Hurricanes, landslides and volcanic activity are hazards that often impact the country. In 2010 alone, two consecutive disasters — Tropica Storm Agatha and the eruption of the Pacaya volcano — caused an estimated $1.55 billion of damage, accounting for 4.1 percent of the country’s gross domestic product.

Each disaster has a devastating impact not only on lives and families, but on livelihoods as well, often making financial recovery difficult after a natural catastrophe. In turn, this affects the economy and impacts the country’s growth and development potential for years to come.

One solution is MiCRO — a specialty re-insurance company and social enterprise focused on the consequences of natural disasters, bridging the divide between the world’s insurance markets and the most vulnerable, low-income people. MiCRO’s goal is achieving the innovations that will unlock the offering of microinsurance policies that are renewed each year and achieve scale.

Swiss Re recently partnered with MiCRO for the launch of “Esfuerzo Seguro,” the first natural catastrophe microinsurance cover in MiCRO’s Central American Program.

Coverage for drought, rain and earthquake


Esfuerzo Seguro is the first index protection offering business interruption cover to rural populations in Guatemala for losses caused by severe drought, excess rain and earthquake. More specifically, the product is targeted to support financially vulnerable individuals engaged in small farming or entrepreneurial activities.

Swiss Re supports MiCRO in this progressive endeavor to further expand access to insurance for people who find it more difficult to recover from the severe impacts of weather. Swiss Re is committed to supporting MiCRO as it expands this first-of-its-kind parametric protection via CADME (The Central America Disaster Microinsurance Expansion Programme).

How it works


Esfuerzo Seguro is distributed by insurer Aseguradora Rural, bundled with loans provided by bank Banrural. The product was designed to meet the affordability standards indicated by clients, and it will offer quick, transparent and hassle-free payments in case of risk events. The cover is complemented with a disaster risk reduction component, and the delivery of a 72-hour emergency kit with specific training on disaster risk preparedness is at the core. In addition, weather information will be shared via mobile phones with the support of CONRED (Guatemalan National Coordinator for Disaster Reduction) and mobile services provider Tigo.

The product was launched in mid-November as a pilot in the areas of Huehuetenango and Chiquimula, which will allow for testing and adjustment of operational and sales aspects, followed by a scale-up on the national level.

Following the successful launch in Guatemala, MiCRO and Swiss Re are working with partners to replicate the product in El Salvador targeted to launch in early 2017.

Related: How parametric insurance can help after natural catastrophes

Paula Pagniez is senior microinsurance specialist for Swiss Re. Connect with her via LinkedIn

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