Dominican Republic Contracts First Parametric Insurance as Part of Its Adaptive Social Protection System

• The Dominican Republic has become the first country in Latin America and the Caribbean to integrate parametric insurance into its adaptive social protection system. Developed through the Tripartite Agreement between the United Nations Development Programme (UNDP), the Insurance Development Forum (IDF), and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF), the initiative will initially protect 3,030 climate-vulnerable households enrolled in a conditional cash transfer programme.
• The insurance product uses a parametric mechanism that automatically triggers payouts when predefined thresholds for excessive rainfall or strong winds are reached, using independently verified satellite and meteorological data.
• The new insurance policy, activated on June 15th, provides an additional layer of protection for households most exposed to climate-related events. The objective is not simply to compensate losses after a disaster but to ensure that financial assistance reaches affected families quickly, allowing them to cope with shocks before they escalate into long-term crises.
• By strengthening the government’s ability to respond rapidly, the programme transforms public support into timely and tangible assistance for communities facing extreme weather events. This approach reflects a growing recognition that climate resilience depends as much on speed and preparedness as on recovery.
• For AXA Climate, a member of the consortium that designed the solution, this milestone demonstrates how insurance can move beyond traditional compensation mechanisms to become a proactive tool for social resilience. By embedding risk financing directly into social protection systems, governments can deliver faster and more predictable support to vulnerable populations exposed to growing climate risks.
• Beyond its immediate impact, the initiative offers a potentially scalable model for other countries seeking to strengthen climate resilience. As climate-related disasters become more frequent and severe, governments are increasingly exploring ways to build anticipatory systems that protect people before vulnerabilities turn into humanitarian or economic crises.
• Consequently, this initiative demonstrates how insurance can strengthen preparedness, support fiscal resilience and accelerate recovery. More importantly, it shows that climate resilience is not only about rebuilding after a disaster, but it is also about ensuring that people have the tools and support they need before disaster strikes.

(Source: Climate.AXA)