Some 2,000 flood-affected casual labourers from Kurigram district have received an insurance pay-out of Tk 2,700 each.
This will contribute towards compensating them for their wage losses caused by flooding throughout the months of July, August and September 2020, the World Food Programme (WFP) said on Wednesday.
The UN food agency, Oxfam Bangladesh, and the Green Delta Insurance Company Ltd. launched a new insurance scheme in July this year on a trial basis.
The purpose was to learn whether this could be useful to support casual agricultural labourers affected by a prolonged monsoon flood like the one that hit Bangladesh this year.
The experience from this flood insurance trial will contribute towards designing more appropriate insurance products for the poor and vulnerable.
“Risk insurance transfer mechanisms have the potential to be an effective tool to protect casual labourers from the impact of natural disasters on their ability to work and meet their families’ daily food needs,” said Richard Ragan, WFP Bangladesh Country Representative.
The trial scheme and initial product have been developed with funding from the Korea International Cooperation Agency (KOICA).
The overall goal of the initiative is to enhance the ability of households in flood-affected areas to deal with shocks while improving their ability to reduce and manage risks as well as maintaining their food security levels.
"This innovative approach can also be tested to support other vulnerable groups like smallholder farmers," said Young-ah Doh, Country Director of KOICA Bangladesh Office.
"KOICA believes that this trial may inspire the government as well as other development partners to see private sector interventions like insurance as a possible effective approach to reduce human sufferings and losses from this kind of catastrophic floods".
A changing climate with growing intensity of rainfall has increased the frequency of floods in Bangladesh.
Especially this past monsoon, the country faced a prolonged flood, destroying homes, crops, livestock, resulting in loss of employment opportunities – and thus income – for casual agriculture labourers.
This adverse situation was further compounded by the economic and health impact of the coronavirus pandemic.
"Oxfam believes that this flood insurance scheme will help vulnerable groups like casual agricultural labourers in Bangladesh in covering their wage losses and contribute to reducing the inequality”, said Dr Dipankar Datta, Oxfam in Bangladesh Country Director.
The product has been developed based on an analysis of over 19 years of satellite data, validated by water level and rainfall data.
The pay-out is made based on pre-defined flood indexed parameters such as inundated area as a percentage of the total geographical area and the duration of flooding. Green Delta Insurance Ltd. covers the risk as the insurer.
Technical partners, Weather Risk Management Services (WRMS), the International Water Management Institute (IWMI), and Save Earth Climate Services Ltd. provided historical data to develop the index-based flood insurance product, the WFP said.
