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The product focus on both frequent and severe extreme weather events due to wind-speed and rainfall. Based on the topographic relief and geographic location of the Philippines local government units structure (municipalities) trigger indexes for wind-speed and rainfall per municipality have been developed. As the trigger depends on the individual LGU's geographic profile, municipalities individual risk perception and vulnerability will be considered by the index . Accordance to the intensity of the event the trigger are categorize in three levels (yellow, orange and red) representing following reoccurrence period:
Yellow : 10-15 years
Orange: 15-20 years
Red : More than 20 years
If either wind-speed or rainfall exceeds the predefined trigger value in either of the 3 colour codes, we considered the municipality "affected". Cooperatives with operations in the "affected" municipalities will receive a claims payout. |
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HOW IT WORKS |
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Natural catastrophe often has a devastating effect on the poor households' cash flow, liquidity and earning capacities. Particularly financial service providers for the poor (like cooperatives) experience the high vulnerability of the poor towards outlier events in their portfolio. Like for example loan borrowers who- after the occurrence of a nat cat event- might face difficulties to fulfil their duties. As a consequence the loan default rate of the lending institution will increase. Subject to the geographical outreach of the event and the borrowers concentration within the region severe solvency issues of the financial service provider could be the consequence.
The services offered to the poor by these institutions are crucial to manage their daily live. By protecting the portfolio of the financial services in case of extreme event, reliable financial capacity can be ensured particularly at the time where it is most needed. |
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The Payout for "affected" Municipalities |
The annual insurance is unlimited. Based on the category of wind speed and rainfall as evaluated by an independent consultant the affected municipalities will be declared and categorized by its intensity. |
All insured cooperatives whose members are living in the affected municipalities are entitled to receive a payout. |
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Where does the DATA come from? |
The relevant trigger points will be calculated and determined by independent consultant with support from Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA).
In times of severe weather conditions, weather data will be published by the consultant on a webpage (NatCat Monitoring) and made available to all cooperatives. |
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Rainfall |
Rainfall trigger is based on satellite data provided by TRMM the Tropical Rainfall Measuring Mission (TRMM). It is a joint mission between NASA and the Japan Aerospace Exploration Agency (JAXA) designed to monitor and study tropical rainfall.
Three-hourly satellite coverage, dated 25 May 2004, 0000 UTC
(Source: Journal of Hydrolometerology)
The satellite has been in operation since 2002 and covers the whole tropical region in a regular series of orbits. |
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Windspeed  |
Wind-speed trigger is based on information from Regional Specialized Meteorological Center (RSMC). RSMC is operated by Japan Meteorological Agency (JMA) within the framework of the World Weather Watch program of World Meteorological Organization(WMO). Their primary aim is to assist national meteorological services in Asia and the North Pacific in issuing accurate tropical cyclone.
Best track of Typhoon Durian centre across the Pacific Ocean and South China Sea (26 Nov to 06 Dec 2006)
(Source: Japan Meteorological Agency) |
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