Pasture Loss Indexed Insurance in Chile

Abstract

The aim of this research is to establish a system of protection against loss of grazing land due to adverse weather, under an experimental type of indexed insurance for the sheep farming regions of Maule and Biobio (Chile). For the assessment of the damage impact the Normalized Difference Vegetation Index (NDVI) measured by means of remote observation will be used, an index that correlates multitude of variables such as vegetation vigor and photosynthetic activity. The proposed model is based on public and private partnerships, so that private insurance companies offer coverage with the government’s support and protection. The necessary technical foundations have been laid to experimentally implement an indexed insurance in order to cover pasture loss caused by adverse weather in sheep farming in the regions of Maule and Biobío.

We would like to express our gratitude to the Inter-American Development Bank for financing a great part of the actions undertaken in the implementation of this project. Our thanks to the former President of ENESA, Jaime Haddad Sánchez de Cueto, José María García de Francisco, Executive Manager of ENESA and COMSA Executive Manager Ricardo Prado for their institutional support which has made it possible to carry out this initiative. Finally, we would like to thank Fernando Burgaz Moreno for strengthening relations between ENESA and COMSA, during the years he served as Director of ENESA, a period during which the idea of initiating this study was conceived. We also thank the collaboration of José Luis Casanova and Pablo Salvador (LATUV), Marcel Castillo Fuentes and Carolina (INIA-Chile); Elsa Sanchez and Manuel Cardo (AGROSEGURO); Camilo Restrepo and Paula Valdés (COMSA) and Ascension Garcia (ENESA).