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WTW launches Asia’s first 4-peril parametric insurance solution to unlock financing for aquaculture development

July 12, 2023

New innovative structure protects against multiple weather risks not covered by traditional insurance, enabling shrimp farms development in Sri Lanka

SINGAPORE, July 12, 2023 — Leading global advisory, broking, and solutions company WTW (NASDAQ: WTW) has launched Asia’s first 4-peril parametric insurance to protect Sri Lanka’s shrimp farms against weather risks, marking a crucial turning point in Asia’s aquaculture development.

The unique solution was designed and placed for Taprobane Seafood Group, Sri Lanka’s largest seafood company, helping them to meet a critical condition to secure US$15 million in project financing from Dutch entrepreneurial development bank FMO.

Shrimp farming is associated with a diverse range of risks and uncertainties, most prominently the exposure to weather risks across coastal regions where farms are traditionally located. To safeguard Taprobane against such vulnerabilities and unwind potential bottlenecks that constrain the injection of much needed capital, WTW has structured the region’s first 4-peril parametric insurance solution that covers four key weather risks: earthquake, typhoon, excess rainfall and heat stress.

With the parametric insurance solution, Taprobane is able to secure the loan to develop sustainable shrimp farming and provide gainful employment to vulnerable communities locally, in turn enabling the growth of aquaculture in Asia and easing the ongoing food security concerns.

Marc Paasch, Global Head of Alternative Risk Transfer Solutions at WTW said: “In the face of climate change, the growing susceptibility to natural catastrophes across many Asian markets could mean that food producers based in at-risk locations can suffer adverse impact, affecting entire societies. This signifies an urgent need for innovative insurance and financing tools to better protect businesses. Our new 4-peril parametric insurance provides an efficient and simplified solution to support businesses vulnerable to multiple weather events that are not covered by traditional insurance products in the market.”

As Sri Lanka’s largest seafood business, Taprobane will use the funding from FMO to rehabilitate abandoned farms owned by the company and by third-party growers, as well as invest in new farms, circular tanks, hatcheries, and a new processing facility. This will also help to support the employment of local employees that are made up predominantly of underprivileged women, including war widows, throughout the northern and northwestern provinces of the country.

In addition to financial support, FMO has provided technical assistance to help Taprobane achieve the Aquaculture Stewardship Council (ASC) certification, which recognises companies for their responsible seafood farming practices.

Pieternel Boogaard, Director Agribusiness, Food, and Water at FMO said, “Amidst challenging market conditions, the parametric structure has provided the much needed insurance protection when no traditional products were available. This significantly reduces the credit risk associated with the project financing, enabling FMO to play a key role in scaling local shrimp farms production, driving sustainability and economic development among some of Asia’s most vulnerable communities in line with our updated Strategy 2030: Pioneer, Develop, Scale.”

Richard Zhang, Head of Alternative Risk Transfer Solutions, Asia at WTW added, “Using innovative risk analytics to underpin this bespoke parametric structure, WTW has demonstrated how we can play a critical role in ensuring that companies like Taprobane received the needed financing and insurance to protect their businesses. This will open the door for more sustainable seafood farming and mitigate the effects and impacts caused by climate change, which has been a challenge increasingly faced by local farms in Asia. Our unique solution will be critical to unlock the growth of aquaculture and meet the increasing food demand in the region.”

The maintenance of a sustainable food system has been challenged by the war in Ukraine and increasing extreme weather events in recent years. In 2022, around 258 million people across 58 countries and territories faced acute food insecurity at crisis or worse levels.[1] With production reaching a record 122.6 million tonnes in 2020, aquaculture is now the fastest growing agri-food sector globally and has an important role to play in addressing food security challenges. Of which, over 90% of the total production is dominated by Asia, supported by the growth of farmed shrimp industries across markets such as India, Vietnam, Thailand, Indonesia and Sri Lanka.[2]

About WTW’s parametric solutions

Unlike traditional insurance, parametric insurance solutions protect the insured company’s losses due to natural disasters and severe weather risks, with or without physical damage. It relies on public data for underwriting and loss calculation, overcoming challenges faced by conventional insurance solutions, which are often unwilling to insure assets located in remote areas.

In the event that any of the four weather risks do occur under the 4-peril parametric insurance solution, the pre-agreed pay-out will ensure that claims can be settled in a much shorter time. The simplified underwriting process also helps to reduce marginal costs and increase price competitiveness as the payout is subject to the insured company’s actual financial losses sustained.

WTW is a pioneer and leader in the development of innovative and tailor-made parametric insurance solutions across sectors such as renewable energy, agriculture, and logistics to enable business growth, contributing to local employment and development. Most recently, it launched Nitrogen Risk Insurance, the world’s first parametric insurance solution that allows sugarcane farmers in Queensland, Australia, to cover the risk of yield shortfall from reduced applications of nitrogen fertiliser on ratoon crops.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.


  1. Global Report on Food Crises 2023. Return to article
  2. Food and Agriculture Organisation of the United Nations. Return to article
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