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Parametric Climate Insurance
A proven model ready to scale
Climate change is making extreme weather events more than a series of isolated disasters. It’s putting the future of farming communities at risk.
For vulnerable households, climate induced hazards mean losing crops, income and the ability to recover, while disaster financing is too slow and fragmented to provide the support they need.
Practical Action is helping to build a joined-up risk ecosystem where insurance delivers fast, predictable financial protection that allows farmers to recover faster and build long-term resilience.
people affected annually
lost, 2012-24
lost, 2012-24
Sources: MoHA Nepal, DesInventar, ICIMOD, World Bank · 2012–2024
Extreme weather doesn’t only destroy crops. It destroys livelihoods, confidence and opportunity. Through our work in Nepal we’ve seen that every monsoon season, thousands of farmers face losses that leave them struggling to rebuild before the next planting season. Without a reliable financial safety net, households are pushed deeper into poverty year after year.
These impacts are not felt equally. Women, marginalised communities, landless farmers and people with disabilities face the greatest barriers to recovery. Disaster financing systems are often reactive, fragmented and unable to respond quickly enough.
As climate change accelerates, so do the costs of inaction. Without effective solutions, farmers continue to shoulder climate risk alone.
What we’re doing about it
Parametric climate insurance can break the cycle; delivering fast, predictable payouts before farmers fall back into poverty.
Rather than assessing individual losses, payouts are triggered by trusted climate data and weather alerts, enabling support to reach farmers quickly when they need it most. These payments help households recover before the next planting season and give them the confidence to invest in their farms and businesses without fear that a single event will wipe everything away.
Practical Action has demonstrated that parametric insurance works best as part of an integrated risk ecosystem. By bringing together climate data, early warning systems, policy, insurance providers, government agencies, local partners and communities, the model delivers more than financial protection – it strengthens climate resilience.
Our work in Nepal has helped establish the policy environment, build inclusive insurance products, embed the approach within local government planning and create a proven model that is ready to scale. We have ambitions to expand across ten priority river basins in Nepal, to pioneer parametric insurance for urban heat, and to lay the foundations for future multi-hazard protection across Asia.
This is work that can’t wait. Join us to help scale climate resilience where it is needed most.
Partner with us
Corporate Partners – Emily Darroch
Institutional Partners, Trusts and Foundations – Victoria Ireland
