Nagaland, a mountainous state in northeast India, has renewed its groundbreaking parametric disaster insurance program, reaffirming its commitment to safeguarding critical infrastructure and ensuring rapid financial response to natural catastrophes. This makes Nagaland the first state in India to adopt such a measure, showcasing its proactive approach to disaster risk management.
In a significant development, Nagaland has signed a Memorandum of Understanding (MoU) with SBI General Insurance to continue its parametric insurance coverage. This renewed agreement is supported by reinsurance from global giants Munich Re and GIC Re, ensuring the state’s protection against natural disasters like floods, landslides, and droughts.
Pioneering Disaster Risk Management
Nagaland initially introduced parametric insurance in 2020 with Swiss Re and Tata AIG General Insurance Company Limited. The current renewal marks a shift to SBI General’s Disaster Risk Transfer Parametric Insurance Solution (DRTPIS), a product designed to offer swift financial aid following natural disasters. This product, now adopted by the Nagaland State Disaster Management Authority (NSDMA), is hailed as a revolutionary step in the state’s disaster management strategy.
Chief Minister Neiphiu Rio highlighted the importance of this insurance solution, stating, “The State Government and SBI General signed a Memorandum of Understanding (MoU) for a Disaster Risk Transfer Parametric Insurance Solution (DRTPS), making Nagaland the first Indian state to implement this disaster management insurance. This parametric multi-year risk transfer solution will protect the State’s critical infrastructure and reduce economic losses due to disasters.”
Strategic Protection for Nagaland
The renewed agreement spans three years, with the Nagaland government bearing the cost of premiums. This insurance solution is particularly crucial for Nagaland, a region highly vulnerable to natural calamities, and represents an essential step in India’s broader efforts to mitigate the economic and human impacts of natural disasters.
By continuing this parametric insurance coverage, Nagaland not only strengthens its resilience against natural catastrophes but also sets a precedent for other states in India to follow, ensuring swift and efficient financial support for recovery and rebuilding efforts.
