Innovating to achieve inclusive risk financing in Cuba: WFP’s integrated approach to supporting vulnerable people- 2021

This factsheet details the efforts being made by the World Food Programme (WFP) in Cuba is adopting an integrated approach to reduce the vulnerability of farmers to drought and climate change impacts by promoting innovation on three fronts: i.) “preventive” insurance and disaster risk reduction (DRR) measures; ii.) parametric Area Yield Index Insurance (AYII); iii.) crop monitoring and Early Warning Systems (EWS). This factsheet provides an overview of Cuba’s integrated approach and how WFP is promoting innovative risk financing tools to better manage climate-related disaster risk in the country.

The report notes that Cuba has developed the concept of "preventative" insurance, which aims to incentivize the adoption of DRR activities in order to guide the insurance pricing by the level of vulnerability of farmers. However, there is still no parametric insurance registered in the country. There is currently an AYII prototype in development through a consortium of partners. The product can offer coverage against a host of risks affecting a particular area, including pests and diseases. WFP Cuba has also been working on improving early warning systems against drought and improving communication flows between farmers and other local stakeholders. These efforts are bolstered by improvements in satellite technology which is also expected to boost usage of insurance products.