Europa Re to back parametric cover for Honduras manufacturing workers

By Henry Gale

April 14 - (The Insurer) - Europa Re is developing an insurance solution for manufacturing workers in Honduras vulnerable to hurricanes, with support from the InsuResilience Solutions Fund (ISF), ImageCat and the country's disaster relief agency, the ISF said on Monday.

The project aims to introduce parametric insurance coverage that would provide fast payouts to help workers after hurricanes and floods. Many of Honduras' low-income families work in the manufacturing sector, the ISF said, which experienced significant disruption and job losses after hurricanes Eta and Iota in 2020. It added that women, who make up nearly half of the workforce but earn 42% less than men, were particularly affected.

Swiss reinsurer Europa Re will lead product development and provide risk capacity for the coverage. Disaster risk specialist firm ImageCat will work on hazard assessment and risk modelling, while the Permanent Contingency Commission of Honduras will support marketing and awareness. The ISF is co-funding the product's development and implementation.

The initiative focuses on the north of Honduras, particularly the Sula Valley, home to 81.6% of the maquila industry, which refers to foreign-owned manufacturing plants that predominantly export goods to countries such as the U.S.