Gallagher Re, the global reinsurance broker, on behalf of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF Insurance Company), has structured and placed a parametric re/insurance programme for the government of Lao PDR.
The policy was established on May 3, 2025 and provides up to $16 million in aggregate parametric protection.
Moreover, the policy’s payout triggering mechanism is based on actual, reported loss information aggregated at the national level, which makes it one of the first, globally, to use a government-reported impact-based trigger.
Gallagher Re also explained that the parametric structure is triggered by the number of people that are affected by a covered peril, which established domestic agency, the National Disaster Management Office (NDMO), independently reports.
The reports are typically available within days after an event, and their use as a parametric trigger for financial response is backed by advanced analytical work carried out by Gallagher Re.
“This new type of trigger was required because traditional hazard-based markers are unable to fully capture the variety and complexity of flood and other catastrophe events in the region,” commented Gallagher Re.
The resulting NDMO-based framework helps to address both SEADRIF and the government of Lao PDR’s needs for financial protection products which closely align with the observed impacts on livelihoods.
“The product shows great potential to be further scaled up and to help reduce the protection gap in the region in the future,” Gallagher Re added.
“Gallagher Re is proud to have collaborated with SEADRIF on renewing this groundbreaking product. This achievement was underpinned by comprehensive analytical work and close consultations with clients and markets,” commented Antoine Bavandi, Global Head of Public Sector, Parametric & Climate Resilience Solutions at Gallagher Re.
Adding: “Our innovative parametric set-up further pushes the boundaries of disaster risk finance and represents a solution that is both simple and more reliable. It captures the complexities of extreme catastrophe events such as flooding whilst minimizing basis risk. It shows great potential for replicability in flood-prone countries and we look forward to further expanding it with SEADRIF in the region.”
“We appreciate the technical leadership of Gallagher Re in bringing this enhanced policy to reality. This milestone represents not only a significant achievement for SEADRIF but also an advancement in parametric insurance products,” said Benedikt Signer, Executive Director of SEADRIF Insurance Company.
“We are committed to serving all ASEAN member countries and making a meaningful impact to protect vulnerable populations and fostering sustainable development. We look forward to our continued partnership with Gallagher Re to expand our impact,” Signer concludes.
