Liberty Mutual Reinsurance has launched a new parametric livestock insurance product in Colombia, aiming to protect farmers from climate-related risks and enhance the resilience of agricultural financing.
Liberty Mutual Reinsurance (LM Re) has introduced a parametric insurance product to help Colombian farmers mitigate the financial impact of climate-related disasters.
Developed in collaboration with XS Latam—part of XS Global Group—and SFA CEBAR, the new product provides protection against both drought and flood, two major threats to Colombian agriculture.
The cover builds on a prior LM Re pilot offering drought protection, now expanded to cover flooding through the integration of advanced flood mapping from parametric platform Floodbase and EarthDaily’s geospatial analytics.
Jean-Christophe Garaix, head of agriculture and parametrics at LM Re, said the solution is tailored to support the country’s farming economy.
“With farmers in Colombia routinely relying on annual loans to farm their land, should adverse weather cause a herd loss, many must sell land to repay the loan,” Garaix said.
“This product is designed to mitigate that risk, making farming much more resilient.
“It also simultaneously reduces the risk banks face in offering finance, creating the potential for cheaper loans, which will further help support resilient farming in Colombia.”
Colombia’s agricultural sector is highly exposed to extreme weather due to its geography. The country has suffered devastating floods—including major losses last November—as well as prolonged droughts over the past decade.
The parametric model allows for rapid payouts based on predefined triggers rather than traditional claims processes.
It also resolves a major technical barrier that has previously hindered similar insurance products in the region: persistent cloud cover that limits satellite visibility.
LM Re said its solution enables a daily basis measure for the index, making it sustainable in areas where satellite reliability has historically been an issue.
By offering swift financial relief through its trigger mechanisms, the cover is intended to prevent loss of land and support the long-term viability of Colombian farms.
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