Proceedings of IAHS
Proceedings of IAHS
PIAHS
Articles | Volume 385
Articles | Volume 385
https://doi.org/10.5194/piahs-385-117-2024
© Author(s) 2024. This work is distributed under
the Creative Commons Attribution 4.0 License.
https://doi.org/10.5194/piahs-385-117-2024
© Author(s) 2024. This work is distributed under
the Creative Commons Attribution 4.0 License.
Articles | Volume 385
Post-conference publication
 | 
18 Apr 2024
Post-conference publication |  | 18 Apr 2024

Mitigating Drought Financial Risk for Water Supply Sector through Index-Based Insurance Contracts

Gabriela C. Gesualdo, Marcos R. Benso, Fabrício A. R. Navarro, Luis M. Castillo, and Eduardo M. Mendiondo

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Short summary
We simulated indexed insurance for a water utility responsible for providing water to 7.2 million people in a metropolitan region. According to our findings, an annual amount (premium) of USD 0.43, 0.87, and 1.73 should be charged per person to obtain drought coverage for three, six, and twelve months. The premium fee can be implemented in the water bills as a new strategy to pool the risk between the supplied users and the utility, to prevent them from being exposed to surcharge fluctuations.
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