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Global Parametrics Completes First Round Financing

The innovative social venture is off to a strong start

Global Parametrics has secured additional funding for a new initiative which will increase access to disaster protection against the impacts of climate change for up to 60 million of the most vulnerable people in developing countries by 2020.

The UK Government, through the Department for International Development (DFID), will provide £7.9 million of support to develop innovative financial solutions by working directly with firms and NGOs, providing services to poor and vulnerable people. The investment complements GP’s first equity investor, the German Government, via their development finance bank KfW and the Climate Insurance Fund

Global Parametrics’ unique solutions for indirect insurance will mean, for example, that small banks or agricultural cooperatives, who are lending to the poor in the developing world, can continue or even increase their lending in the aftermath of a natural disaster (such as tropical cyclone, drought, earthquake), helping to build resilience for households and communities in the process. GP is currently working with VisionFund International, an NGO that operates a network of microfinance institutions in developing countries, to implement this type of programme in nine countries.

Similar financing solutions are envisioned for the humanitarian sector where climate data can be analysed to forecast extreme drought conditions and trigger payments as early as possible, before the disaster intensifies. The quick payments can play a vital role in avoiding famine and extreme suffering by thousands of vulnerable people. GP is working with the Start Network, made up of 42 national and international aid agencies from five continents to design appropriate risk transfer mechanisms to address these challenges.

GP will use its own proprietary weather data modelling platform to design indirect insurance solutions for firms and NGOs. In addition, GP will advise clients on risk and financial engineering solutions that can be used to optimise the mitigation, management and transfer of natural disaster risk. Finally, GP will have access to risk capital via the Natural Disaster Fund, (NDF).

DFID’s investment in Global Parametric builds on the UK’s leadership in developing innovative insurance mechanisms, providing vulnerable developing countries with faster and more reliable funding in the event of shocks such as natural disasters.

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