El Salvador Produces Insurance

Produce Seguro is the first parametric insurance against natural catastrophes in El Salvador, launched in June 2018. It is designed to cover business interruptions caused by drought, excess rainfall and earthquakes. This insurance requires an investment of only 5% of the loan amount, thus protecting agricultural businesses and investments. This insurance was developed under the Central American Disaster Microinsurance Expansion Program (CADME), executed by MiCRO with the support of several organizations, Produce Seguro is a parametric index-based insurance that offers comprehensive coverage against earthquakes, droughts and excesses. of rain, monitored by the Ministry of Environment and Natural Resources (MARN) and international scientific agencies such as NASA. The insurance provides gradual payments up to 100% of the initial value of the loan and is only available with productive loans, both agricultural and commercial. The cost of insurance is 5% plus VAT of the insured sum. To facilitate an initial experience with the product, the BFA is subsidizing part of the premium for some low-income customers during the pilot phase. Additionally, Produce Seguro includes a value-added program (PVA) aimed at increasing clients' resilience to natural disasters. The main component of the PVA is the Prevention Pathway, a five-step process that prepares clients for natural disasters.