THE Philippine Crop Insurance Corp. (PCIC) hopes to explore an agreement with the United States Agency for International Development (USAID) to further develop a system of Weather Index Based Insurance (WIBI), which started pilot testing in 2014.
PCIC Senior Vice-President Norman R. Cajucom told BusinessWorld that the system lacks weather data to offer insurance at a predictable level of risk.
“The PhilCCAP (Philippine Climate Change Adaptation Project) Project Manager Wilbur G. Dee is now our consultant for the USAID. [Mr. Dee] submitted it to [USAID] and the USAID liked it,” he added.
“So, we will have an exploratory conference [next month], a seminar-workshop to check the feasibility of this project. We will also see here which SUCs (State Universities and Colleges) are willing to take part in the project.”
PCIC President and Chief Executive Officer Jovy C. Bernabe said a planned new WIBI product will be more cost-efficient than traditional models, which would require adjusters to head out to farms to calculate levels of insurance cover based on their assessment of the risks.
“Through the WIBI, there’s no more need to hire adjusters. We just have to look at our computer. Every day, we will just have to look at the rainfall in that area. If there’s low rainfall in that area in that particular stage of rice production, then the trigger payment is already patterned,” he said.
However, Mr. Cajucom noted that this is still incomplete, as the first three pilot tests only covered the effects of low and excessive rainfall for rice and corn. With USAID and SUCs as partners for research, Mr. Cajucom said PCIC will be developing indices that will account for the risk posed by floods, typhoons and high winds.
Mr. Cajucom also clarified that the role of the SUCs in the project is to identify the most resilient variety of crops in each region that can withstand the climate change. The studies will be used as input for creating PCIC’s new insurance packages.
“We could [then] identify, among the provinces and areas, what are the most resilient variety here that can withstand climate change,” Mr. Cajucom said.
“You can then draft the weather indices and create an insurance package. These crops could be resilient but if these crops are hit by the weather, then there will be a cost to replace them, which farmers can be compensated for,” he added.
PCIC has expanded its insurance coverage from rice and corn previously to high-value crops such as sugarcane, bananas and abaca, as well as to livestock, farm equipment and fisheries. — Anna Gabriela A. Mogato