Nagaland Signs MoU for Parametric Disaster Insurance

• 06 Aug 2024

On 2nd August 2024, the Government of Nagaland entered into a Memorandum of Understanding with SBI General Insurance for a parametric insurance solution to enhance disaster risk management and recovery efforts.

• The MoU was signed in the presence of Chief Minister Neiphiu Rio and outlines a Disaster Risk Transfer Parametric Insurance Solution (DRTPS) to protect both the population and critical infrastructure during disasters.
• The DRTPS is designed to improve the state's ability to respond swiftly and effectively to disasters, ensuring financial protection and support for rebuilding efforts over a multi-year period from 2024 to 2027.
• The scheme uses data from ground weather stations to provide a unique parametric insurance solution that covers the entire state of Nagaland.
• The Nagaland State Disaster Management Authority (NSDMA) will implement the DRTPS, marking a pioneering effort by the state in the risk transfer sector, potentially serving as a model for other Indian states.
• The DRTPS is particularly relevant given the increasing frequency of extreme weather events due to climate change, which have caused significant economic losses globally.
• NSDMA's previous implementation of DRTPS since 2020, supported by the InsuResilience Solution Fund, has provided valuable insights and set a precedent for future parametric insurance solutions in India.