Dominican Republic faces call for parametric insurance amid climate risks

The Dominican Republic faces increasing pressure to adopt parametric insurance to mitigate catastrophic climate risks. As one of the ten most climate-vulnerable countries due to its size and exposure, the nation has faced significant economic losses from hydrometeorological events. Between 1995 and 2024, the country averaged two such events per year, including several major hurricanes that caused losses totaling significant percentages of the national GDP.

In contrast, Peru has recently formalized its parametric insurance market. The Superintendencia de Banca, Seguros y AFP (SBS) approved new regulations allowing insurers to offer coverage for earthquakes, tsunamis, floods, and frosts. These policies provide automatic payments once a specific parameter is met, eliminating the need for traditional damage assessments.