Fiji has hired an Indian start-up to provide weather-related risk mitigation services. Gurgaon-based Weather Risk Management Services Pvt Ltd will develop a ‘parametric insurance’ model for mitigating weather risks, mainly cyclone risks. ‘Parametric insurance’ means that if a weather event happens, the insured will get money from the insurance company based on certain parameters, such as wind speeds and intensity of (say) cyclone.
Weather Risk Management Services (WRMS) is an IIT-Kanpur incubated company, won the job under a program of the United Nations Capital Development Fund (UNCDF), the company’s Co-Founder and Director, Anuj Kumbhat, told Business Line on Wednesday.
The service is to be formally launched in Fiji on August 24.
The objective of the program is to improve the financial preparedness of Fiji against climate change and natural disasters, leveraging India’s experience in providing such services.
Incepted in 2004, WRMS has so far serviced 2.5 million farmers, mostly in India, some of them as small as holders of half an acre of land, he said. The ₹30-crore company manufactures and installs sensors to monitor a variety of parameters ranging from soil moisture to pests, and also uses satellite data to warn of vagaries of weather. Importantly, it also provides yield guarantee to farmers.
To illustrate the company’s operations, Kumbhat gave the example of potato farmers in West Bengal who had contracted to supply to Pepsico. Pepsico’s offtake depended upon certain quality standards, such as moisture and sugar content, size, shape and colour, which called for additional expenditure. Pepsico would pay a premium for the produce, but still the farmers had to take a risk in terms of yields not being up to the mark. WRMS stepped in with its ‘package of practices’ including mechanization and guaranteed yield, for a fee. If the farmers followed the package of practices and yet the yield did not pass muster, WRMS paid them a compensation.
Kumbhat said that the company had offered such services to cotton and tomato farmers in Haryana, paddy farmers in Maharashtra and chillies farmers in Andhra Pradesh.