Innovative Flood Index Insurance: Cooperation with the German Aerospace Center (DLR)

In December 2017, the implementation team for microinsurance solutions in contribution to InsuResilience at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH contracted the German Aerospace Center (DLR) with a grant agreement. The objective of the cooperation is an automated flood monitoring, which prospectively shall serve as a basis for a satellite-based flood index insurance.

Objective: Innovative flood index insurance

As one of the first collaborations under the newly installed framework agreement between GIZ and DLR, the largely unexploited potential of modern earth observation satellites for development cooperation purposes shall be made usable. Considering the continuously rising quality and quantity of satellite data, remote sensing is a promising technology for the development of index insurance schemes. Index insurance is a special approach to insurance, which is scalable in the context of development cooperation. Payouts are not based on actual damages, but on an index, which closely correlates with the damages.
The objective of the implementation team of the GIZ InsuResilience project within this cooperation is to develop an index insurance protecting against flood risk for agricultural and non-agricultural households in rural India. The federal state of Tamil Nadu will most likely serve as the study area for the development of the satellite-based flood index insurance. Until now, there are only a few flood index insurance pilot projects. That emphasizes the innovative character of this cooperation.

Satellite-based flood monitoring

GIZ won DLR’s department Geo Risks and Civil Security, which is a partner with renowned scientific expertise for this collaboration. The department is specialized in the usage of satellite data for the monitoring of different natural hazards, such as fires or floods. The department’s information products are being used for example for early warning systems and rapid mapping of natural disasters. The department holds a pioneering role in the automated derivation of flood parameters from radar satellite data.
The objective of the grant agreement is a satellite-based flood detection that delivers the parameters necessary for an index insurance with the required accuracy. In that process, the free-of-cost satellite data from the Sentinel 1 and Sentinel 2 satellites offers promising opportunities to implement cost-efficient insurance for large covered areas and fast payouts for poor and vulnerable people.

In total, the grant agreement has a duration until September 2019. First, the flood detection will be tested in a district in Tamil Nadu. After successful validation, the approach will be subsequently extended to a larger area. The outputs of the collaboration will be integrated continually in the development of the intended index insurance product.

In case of questions or comments, please contact Ulrich Hess (, Nihar Jangle (, or Oliver Milosch (