Weather Risk Management Services (WRMS), in association with the United Nations World Food Programme (WFP), has launched the parametric insurance pilot schemes in Iraq for protecting smallholder farmers and micro-entrepreneurs from the risks associated with climate change.

A media statement said this initiative aims to provide swift and transparent financial relief for losses caused by extreme weather events (heatwave and drought), ensuring resilience and stability for vulnerable communities.

Iraq is often affected by drought, heatwaves, and interrupted rainfall. The traditional insurance models are often unable to capture smallholder farmers because of the complex processes in submitting claims and the cost involved. To address this, WRMS and WFP have implemented a parametric insurance model that automates payouts based on predefined weather conditions, eliminating the need for traditional claims filing and expediting financial support, it said.

Finance relief

The pilot projects are carried out in al-Hamdaniya, al-Mosul, Tilkaef and Kerbela districts, through 400 smallholder farmers under drought insurance and 400 farmers and micro-entrepreneurs under heatwave insurance. The drought insurance coverage is for use between December 2024 and May 2025, and the heatwave insurance will be available between July 2025 and September 2025.

The total sum insured for both drought and heatwave coverage amounts to 700,000 IQD (Iraqi dinar). The National Insurance Company of Iraq (Asia Gate Insurance Company) is underwriting the policies, with WRMS acting as the calculation and technical agent to monitor weather indices and trigger payouts accordingly.

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The statement said this insurance solution ensures rapid financial relief for farmers, removing the need for manual claims processing. Using satellite and weather station data, the model improves accuracy in risk quantification and payout calculation. In addition, the current plan can not only mitigate the economic damage incurred by the climate-induced disaster, but also provide long-term safety of food in disaster areas.

Quoting Anuj Kumbhat, Co-Founder and CEO of WRMS, the statement said: “At WRMS, we are committed to pioneering climate-smart insurance solutions that empower vulnerable communities. Our partnership with WFP in Iraq is a transformative step in financial inclusion and climate resilience. Using parametric insurance, we guarantee that smallholder farmers and micro-entrepreneurs get a share of immediate and transparent financial assistance, which enables them to cope with climate shocks. We are hoping to be able to scale up this effort and bring its benefits to greater at-risk populations.”