Past Collaborations

Over the past decade, the Philippine Crop Insurance Corporation (PCIC) has been actively engaged in piloting various index-based rice insurance solutions. The aim of these initiatives has been to provide farmers with more reliable and applicable insurance products that are responsive to the adverse effects of climate change and other environmental challenges. However, the journey has been fraught with challenges, including significant losses and basis risk due to inaccuracies in weather data and its correlation with actual farm-level losses.

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1. Microinsurance Innovation Program for Social Security (MIPSS) and Remote Sensing-Based Information and Insurance for Crops in Emerging Economies (RICE)

   - Type: Pilot

   - Partner: GIZ

   - Period: 2013-2014

   - Location: Region XIII – Leyte Province

   - Product: Area-Based Yield Index Insurance (ARBY)

 

This pilot project focused on deploying area-based yield index insurance which was an innovative approach at that time, designed to insure crops based on regional yield data rather than individual losses. The project aimed to improve the accessibility and affordability of crop insurance for smallholder farmers in Leyte Province.

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2. Climate Change Adaptation Project (CCAP)

   - Type: Pilot

   - Partner: MDG-F and ILO

   - Period: 2013

   - Location: Region XIII

   - Product: Weather Index-Based Insurance (WIBI), including excess and low rainfall coverage using the ILO Method

 

This initiative was established as part of a broader strategy to integrate climate change adaptation into the national insurance framework. The pilot tested both excess and low rainfall index insurance, providing valuable insights into the practical challenges of aligning index insurance products with the needs of farmers.

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3. Philippines Climate Change Adaptation Project (PhilCCAP)

   - Type: Pilot

   - Partner: World Bank

   - Period: 2013-2015

   - Location: Regions II and VI

   - Product: Weather Index-Based Insurance using ILO Method for excess and low rainfall

 

Similar to the CCAP, this project aimed at piloting weather index-based insurance to enhance the resilience of agricultural stakeholders to climate variability. The focus was on refining the indices used to trigger insurance payouts, aiming to reduce the basis risk that plagued earlier projects.

 

4. WIBI Mindanao

   - Type: Pilot

   - Partner: World Bank-SCCF/UNDP

   - Period: 2014-2017

   - Location: Regions X and XI

   - Product: Weather Index-Based Insurance for rice covering both excess and low rainfall

 

This project was specifically targeted at addressing the unique climatic challenges in Mindanao, using locally relevant data to improve the accuracy and relevance of the insurance products offered.

 

5. 2-in-1 Rice Crop Insurance Product Project for Typhoon Mangkhut-Affected Rain-fed Rice Farmers in Cagayan Province

   - Type: Pilot

   - Partners: UNDP, PCIC, PhilRice & PAGASA

   - Period: 2019 (one cropping season)

   - Location: Region II

   - Product: Weather Index-Based Insurance + Multiple Peril Crop Insurance (MPCI)

 

This pilot was launched in response to the devastating impacts of Typhoon Mangkhut, combining traditional MPCI with index-based components to provide comprehensive coverage.

 

6. Area-Based Yield Index (ARBY) Simulation Studies

   - Type: Simulation Study

   - Partners: PULA Inc, IRRI, PhilRice

   - Period: 2021-present

   - Locations: Regions III, VIII, X (PULA Inc); Regions II, V, VI (IRRI, PhilRice)

   - Product: Area-Based Yield Index for Rice

 

These simulation studies aim to refine and test the ARBY product in various regions, adapting it to local conditions to enhance its effectiveness and reduce the historical high loss ratios experienced in earlier pilots.

 

Challenges and Lessons Learned

Throughout these pilots, PCIC faced a common challenge: high basis risks and mismatch between index triggers and actual farmer losses, leading to significant financial losses. The pilots revealed critical insights into the need for more accurate and localized weather data, better integration of farmer feedback in product design, and continuous adaptation to technological advances in agriculture and climate forecasting.

 

The journey from 2013 to 2023 highlights the iterative process of developing insurance products that not only meet the needs of Filipino farmers but also align with broader objectives of sustainability and climate resilience. The lessons learned from these pilots are vital in shaping a more robust agricultural insurance system in the Philippines.