WP3, led by Ecole Polytechnique and Imperial College London, builds insurance contracts based on the outputs provided by WP1 and WP2 to ensure that weather and climate risks are equitably distributed across supply chain actors, from smallholder farmers to global retailers and manufacturers.
The first commercially translatable insurance products produced by WINnERS will be designed, priced, and tendered in collaboration with re-insurer WillisWatsonTowers and the World Food Programme’s Patient Procurement Platform, a consortium of institutions, banks, food buyers, and input suppliers that aims to create more efficient value chains. Critical to the product design is the nature of the model to be employed for risk sharing amongst the producers, famer’s cooperatives, input suppliers, banks, and buyers, which will be calibrated to customer and market specifications.
In addition to the projected climate and weather driven crop production losses, the contracts will also encapsulate factors such as the relationship between the policy holder and other actors, terms for redistributing insurance payouts, fairness and incentive compatibility amongst supply chain actors, as well as mitigating behavioural risks to buyers such as risk adversity to technology adoption, loan defaults or side-selling by farmers. Together these factors will determine the optimum levels of risk mitigation in sourcing sites globally that can be translated into risk transfer services provided through insurance or re-insurance companies. Food buyers, manufacturers, and retailers will also be able to estimate revenue savings for short to medium term commodity purchases with WINnERS provided services.