Climate resilient parametric insurance and emergency response for floods in Bangladesh Vivid Economics and its partners in the UK and Bangladesh are developing a satellite-based platform to improve resilience to flooding.  It will assist relief efforts by showing resource needs at high spatial resolution in real time during floods, provide funding for emergency response through parametric insurance and improve understanding of flooding to support investment to reduce risk.  

The project team will use satellite imagery, machine learning, hydrological and economic modelling to project relief costs of any flood event, which will underpin the insurance product.  Over time this will support improved resilience to climate change and poverty reduction. Vivid Economics and its partners in the UK and Bangladesh propose to develop an insurance platform to secure funding for flood relief and recovery and promote its effective use. Climate change is increasing the flood risk to Bangladesh's economy and society, but the ability to manage this risk is hampered by an uncertain availability of funding, as well as a lack of implementing capacity. Parametric insurance, which ties assessment of impacts and pay-outs to external indices of event severity, can support more efficient relief and recovery by providing more rapid, certain funding on the scale required. This will support the delivery of SDGs 1 and 13 increasing climate change mitigation and adaption and reducing poverty. 
Innovative use of satellite imagery to map flood extent alongside catastrophe (CAT) modelling to estimate flood likelihoods will deliver a full probability distribution of flood risks. Combining this with on-the-ground cost assessments will enable machine learning to establish a mapping to relief and recovery costs. Together, this allows the team to build a clean index linking floods to economic costs, minimising basis risk. Economic modelling will then combine these to create insurance assessments. A combined platform will allow immediate responses to future flood events.  
In country capacity building will ensure this product build local knowledge of risks, enabling prioritisation of adaption and mitigation investments. International engagements will be supported by the lower informational costs of the insurance product, and the fully developed flood modelling to attract international commercial interest, increasing funding for insurance in Bangladesh.