Ecuador has contracted the country’s first parametric agricultural insurance policies, covering 2,800 smallholder rice and maize farmers, benefiting approximately 10,000 people, against extreme rainfall and drought risk in the climate-vulnerable provinces of Guayas, Los Ríos, Manabí and Loja.
For AXA Climate, this marks a major step forward in advancing parametric insurance as a tool to strengthen agricultural resilience and protect food security in climate-exposed economies.
Strengthening Climate Resilience Through Public-Private Collaboration
The activation of these policies is a major milestone for the Tripartite Agreement Programme – a public-private partnership between the United Nations Development Programme (UNDP), the Insurance Development Forum (IDF), and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF) – to build developing countries’ resilience to climate risk.
Ecuador’s agricultural sector faces increasing exposure to floods, droughts and wildfires. Smallholder farmers, who represent 75% of all farmers in the country, are particularly vulnerable. Protecting them is critical not only for rural livelihoods but also for national food sovereignty.
Designing Parametric Insurance Solutions
The two parametric products, one covering extreme rainfall and one covering drought risk, were designed by AXA Climate together with Guy Carpenter Mexico and Blue Marble, in partnership with the Ministry of Agriculture, Livestock and Fisheries. Local insurer Hispana de Seguros is implementing the policies on the ground.
Launched in 2024, the Tripartite Agreement Programme’s Ecuador project, led by the Ministry of Agriculture, Livestock and Fisheries (MAGP), has focused on developing parametric insurance solutions to enable automatic payouts triggered by excessive rainfall or prolonged drought exceeding predefined thresholds. The parametric policies, now live, are designed to deliver faster and more transparent compensation, helping farming families recover quickly from climate events and reinvest in subsequent planting cycles.
Delivering Immediate Protection to Vulnerable Farmers
Thanks to premium financing from the InsuResilience Solutions Fund, the coverage is provided at no cost to farmers during the initial phase. For the first planting cycle from January to May 2026, 2,511 smallholder rice and yellow maize producers are covered. Among them, 44% are women and 15% are young farmers under 29 years old.
At least 300 additional producers are expected to benefit during the second planting cycle from July to November 2026, reflecting seasonal climatic differences.
Embedding Parametric Insurance into National Policy Frameworks
Beyond product design, UNDP has supported the Ministry of Agriculture with technical assistance and regulatory integration to enable the launch of these pioneering parametric agricultural policies. The initiative contributes to the development of Ecuador’s regulatory framework for parametric insurance and strengthens national climate adaptation strategies.
For AXA Climate, this initiative demonstrates how parametric insurance can be integrated into public policy, agricultural planning and sovereign risk management. By aligning government leadership, industry expertise and development finance, Ecuador is building a durable foundation for climate resilience.
Juan Carlos Vega, Ecuador’s Minister of Agriculture, Livestock and Fisheries said: “These parametric insurance policies align with our commitment to provide smallholder farmers with tools that strengthen their sustainability, especially in the face of rising climate change challenges. It is a tool that financially protects them from climate risks and contributes to our country’s food sovereignty.”
A Scalable Model for Climate-Vulnerable Economies
The Government of Ecuador is exploring opportunities to extend these parametric solutions to additional regions, crops and sectors. This programme illustrates how technology-driven agricultural insurance, grounded in climate data and advanced modelling, can support inclusive development while protecting livelihoods and national food systems.
AXA Climate remains committed to supporting governments worldwide in deploying parametric insurance mechanisms that close the protection gap, accelerate adaptation and enhance long-term resilience in the face of rising climate volatility.
Dr. Nerea Vadillo, AXA Climate Public Sector Technical Lead / IDF Ecuador Project Co-Lead said: “Through the Tripartite Agreement Programme, IDF members have helped deliver a solution that protects vulnerable farmers on the ground today while strengthening Ecuador’s long-term financial resilience to climate risk. This is what building future-ready nations looks like: scalable, country-led solutions that enable faster recovery, informed decision-making, and greater resilience for those most exposed to climate shocks.”
