Gallagher Re has structured and placed a multi-peril reinsurance program on behalf of the Southeast Asia Disaster Risk Insurance Facility (SEADRIF Insurance Company) for the government of Lao PDR.
The two-year policy, which began on May 3, provides up to US$16 million in aggregate coverage. It expands upon SEADRIF’s original 2021 flood-only arrangement by incorporating additional natural perils including typhoon, earthquake, and landslide.
The revised policy builds on operational experience gained following Typhoon Yagi in 2024, when SEADRIF made two separate payouts to Lao PDR totaling US$3 million. The payments covered flooding across 15 provinces and supported local infrastructure recovery.
The first disbursement, totaling US$750,000, was released on Sept. 20, 2024, just five days after peak flooding was reported in Vientiane.
In line with SEADRIF’s governance standards, the Typhoon Yagi payouts also adhered to its Environmental and Social Management System (ESMS) as well as the World Bank’s social and environmental guidelines.
Unlike traditional hazard-based models, the program uses a parametric trigger tied to reported impacts. Specifically, coverage is activated based on the number of people affected by a covered event, as reported by the country’s National Disaster Management Office (NDMO). The trigger is designed to respond to actual losses reported at the national level.
This type of trigger structure aims to address challenges in Southeast Asia, where conventional hazard-based indicators may not accurately reflect the full scope of flood and catastrophe impacts.
Antoine Bavandi (pictured above), global head of public sector, parametric and climate resilience solutions at Gallagher Re, said the renewal of the product with SEADRIF reflects advanced modeling work and dialogue with markets and clients.
“Our innovative parametric set-up further pushes the boundaries of disaster risk finance and represents a solution that is both simple and more reliable. It captures the complexities of extreme catastrophe events such as flooding whilst minimizing basis risk,” Bavandi said.
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