Howden acquires parametric insurance specialist in Latin America

Global insurance broker Howden has acquired a microinsurance specialist that offers parametric insurance coverage against natural catastrophes for underserved populations in Latin America. 

MiCRO, a microinsurance specialist founded by Mercy Corps and Fonkoze after the 2010 Haiti earthquake, designs and implements insurance coverage in Guatemala, El Salvador, Colombia and Mexico. 

Using a parametric insurance model, MiCRO covers financial losses for smallholder farmers and micro enterprises. Payout timelines are based on disaster severity, as opposed to loss adjustments, looking to cushion clients from the effects of natural catastrophes. 

By the end of 2023, MiCRO had over 180 000 active policyholders, including women and smallholder farmers.

The acquisition will expand Howden's parametric insurance capabilities in Latin America. Howden created a new global parametrics practice in October last year to address the escalating demand for climate de-risking capabilities across industries, financial markets and the public sector.

The microinsurance specialist will continue to seek collaboration opportunities with Corps, who exited as part of the deal.

Charlie Langdale, chair of climate risk and resilience at Howden, said: “At Howden, we firmly believe that the insurance market holds significant potential for fostering resilience among underinsured communities, enabling them to adapt to the future climate landscape, and microinsurance is one of the tools to achieve this. MiCRO’s proprietary data platform and exceptional expertise, both in parametric insurance but also in creating wider access to insurance will help us scale this important capability for those most at risk.”

Carlos Boelsterli, chief executive officer at MiCRO, said: “MiCRO has achieved remarkable progress in recent years, and as we embark on further expansion, Howden emerged as a natural growth partner. I have been extremely impressed with their long-term commitment to the underserved and they are undoubtedly a business whose actions speak louder than words. In the face of the global challenge posed by climate change, it is essential that we empower marginalised communities with access to the correct insurance cover to cope with the volatility of tomorrow.”

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