Scaling Inclusive Insurance Through Government Systems: Lessons From the World Food Programme

This case study is part of CGAP's series on scaling inclusive insurance while preserving consumer value. The primary audience is distribution networks, particularly ministries of agriculture and their extension networks, and insurers. This case study takes a deep dive into the World Food Programme's climate risk financing approach in Cuba, Ethiopia, Guatemala, and Zambia, which combines insurance with other financial and non-financial tools to help countries mitigate the impact of climate shocks and act early, before disasters turn into food crises. 

WFP's work on inclusive climate risk financing is unique in its global reach and its relationship and mandate with government actors; several elements are replicable across other contexts: embedding insurance within national agricultural development policies and frameworks and investing in and enabling risk reduction as a foundation for sustainable insurance markets.

Key findings include: 

• Government integration drives scale and efficiency. Embedding insurance within government systems cuts distribution costs, boosts uptake, and — with sustained political and fiscal commitment — fundamentally reshapes economies of scale for climate risk protection. 
• Forecast-based payouts deliver faster, more effective protection. When well designed, anticipatory payouts enable earlier action, better protect smallholder livelihoods, and reduce downstream humanitarian costs compared to traditional indemnity models. 
• Risk reduction is no longer optional — it is a condition for insurability. In climate-exposed agricultural markets, insurance cannot function sustainably without anticipatory action and risk reduction built in from the start, making these prerequisites rather than add-ons.