CPIC & MunichRe - Inner Mongolia Grasslands Index Insurance

Area characterisation:

Terrestrial

Objective:

Protect grassland carbon storage via index

Start/end date:

1 January 2022

Financing:

Private

Potential impacts/benefits:

Protects carbon storage across 87M hectares of grassland
Satellite-triggered parametric claims
Guards against desertification, overgrazing, and natural disasters

Actions:

First parametric carbon-storage insurance for Inner Mongolia grasslands, using satellite remote sensing and a net primary productivity (NPP) index trigger to address disasters, desertification and overgrazing.

Organisations:

Munich Re, Capital Partners, China Pacific Property Insurance Co. Ltd.

Contacts:

Case study referred by UNEP FI. For more information, please contact: info@naturance.eu.

Munich Re's Greater China Agro team partnered with China Pacific Property Insurance to launch the first parametric insurance policy for carbon storage on grasslands in Inner Mongolia in early 2022. The product addresses risks facing the region's 87 million hectares of natural grasslands, including but not limited to natural disasters, desertification and overgrazing — all of which threaten carbon absorption capacity. The insurance uses satellite remote sensing technology for continuous monitoring of grassland conditions and is triggered based on the net primary productivity (NPP) index, a key variable for determining carbon cycling in grassland ecosystems.