Colombia

Building rural financial resilience

A tailored parametric insurance solution has been designed for livelihood protection for smallholder/non-bankable farmers in six departments/states, to reduce the protection gap related to climate risks such as extreme precipitation and drought. A fast, direct payout system for vulnerable smallholder farmers is under development. The project is supported through the Tripartite Agreement (TPA), a public-private partnership between UNDP, 20 of the world’s largest insurers under the Insurance Development Forum, and the German Federal Ministry of Economic Cooperation and Development (BMZ).

UNDP is also helping to develop a capacity-building module for sustainable agriculture practices and associated financial mechanisms.

Increasing actuarial capacity to improve financial risk management

The UNDP Milliman Global Actuarial Initiative (GAIN) aims to help countries predict and prepare for risks by increasing actuarial capacity, enabling better risk modelling and more accurate pricing of insurance and social protection mechanisms. The GAIN initiative is working to improve actuarial training in Colombia through training programmes, mentorship opportunities and support for actuarial professionals.

Protecting biodiversity and small businesses through innovative insurance

In cooperation with BIOFIN, the Biodiversity Finance Initiative, UNDP is implementing an Innovation Challenge in Colombia, bringing together the insurance industry, including insurers, reinsurers, commercial banks, NGOs and environmental associations, to develop a minimum viable insurance product for biodiversity investments. The challenge is focused on generating an insurance tool for nature-based solutions, habitat banking, natural capital protection and/or green solutions in the agricultural sector. The insurance tool should consider the specific dynamics of the business, the risk to be covered and its relationship to the insured green capital.

In a separate initiative, working with insurance association Fasecolda, Banca de las Oportunidades and the Ministry of Commerce, Industry and Tourism, UNDP is promoting insurance for non-agricultural productive units such as shopkeepers, small hotel owners and households as a key lever to generate resilience and financial well-being. The work involves cooperating with the private sector developing innovative insurance products, as well as developing education and research on inclusive insurance and risk management.

Working with Finagro, Colombia’s Agricultural Development Bank, UNDP is designing a parametric product together with financial education module on risk and the use of agro-climatic practices to reach 5,100 small farmers in climate change-vulnerable areas.

 With the Women Protected Programme of the Vice-Presidency of the Republic, UNDP is supporting the development of a project to protect 4,100 women’s productive units through parametric insurance offering coverage for droughts, excess rainfall and earthquakes in rural and urban areas. UNDP is working with the private sector to provide financial education for women’s associations.

 UNDP is innovating in producing data for the Financial Inclusion National Demand Survey, focusing on behavioural sciences and prototyping, in cooperation with the Lab Accelerator.