FINAGRO–FIRA Peer Exchange: Lessons on Agricultural Risk Matrices and Insurance Policy

FINAGRO–FIRA Peer Exchange: Lessons on Agricultural Risk Matrices and Insurance Policy

15 May 2026 | Online

Introduction

The Agri-PDB Platform facilitated a peer-to-peer exchange between FINAGRO and FIRA to support technical learning on agricultural risk management, with a focus on FIRA’s Matrix of Minimum Agricultural Risks and its connection to agricultural insurance policy. The session brought together technical teams working on agricultural risk, climate risk, insurance, sustainability, international cooperation and financial instruments.

For FINAGRO, the exchange was particularly relevant as the institution advances the development of its own agricultural risk matrix. This tool is expected to serve not only as a reference for credit decisions, but also as a guide for incentives and other financial instruments, including agricultural insurance.

Why the Exchange Mattered

Agricultural finance is highly exposed to climate, production, market and territorial risks. For public development banks, managing these risks requires more than individual financial products. It requires institutional tools that can help identify risks, guide decision-making and connect credit with appropriate risk mitigation mechanisms.

FIRA’s experience offered practical lessons on how a risk matrix can support this process. Its Matrix of Minimum Agricultural Risks helps define the risks that should be covered when producers access credit operations supported by FIRA’s guarantee service. These risks are identified through technical analysis, taking into account their probability of occurrence, relevance by territory and crop, and potential level of impact.

The matrix therefore works as a common reference point for several actors:

• Financial intermediaries
• Insurers and insurance funds
• Public institutions
• Producers
• Technical teams involved in credit and risk management

FIRA’s Matrix of Minimum Agricultural Risks

FIRA’s matrix is part of a broader insurance policy linked to its credit and guarantee operations. The objective is not to limit producers to a fixed insurance package, but to establish a minimum floor of risks that should be covered in relevant credit operations.

This approach helps ensure that insurance is used as a meaningful risk mitigation tool, rather than as a formal requirement disconnected from the real risks faced by producers. At the same time, producers remain able to contract additional coverage according to their specific needs.

FIRA’s matrix has evolved progressively:

• 2011: The first version was developed in coordination with Agroasemex. It identified minimum risks by state and agricultural cycle.
• 2020: The matrix became more detailed, incorporating agricultural value chains, crops and specific risk packages.
• 2024: The current version expanded the agricultural matrix and incorporated, for the first time, livestock and fishery products.

This evolution shows the importance of treating risk matrices as dynamic tools. Agricultural production conditions change, new threats emerge, and insurance markets evolve. A useful matrix must therefore be regularly updated.

A Multidisciplinary Working Group

One of the main lessons from FIRA’s experience is the value of a multidisciplinary working group. Since 2018, FIRA has coordinated a group involving public entities, insurance sector associations, insurance funds, banks and non-bank financial intermediaries.

The group has four main functions:

• Improve and update the Matrix of Minimum Agricultural Risks
• Develop mechanisms to centralize and report relevant statistical information
• Promote better practices in agricultural insurance operations
• Increase transparency and access to information for producers and sector actors

A range of institutions got involved in this process, including FIRA, public-sector actors, insurance organizations and financial-sector representatives. This broad participation helps ensure that the matrix reflects different perspectives, including those of insurers, users, intermediaries and public policy actors.

How the Matrix Is Updated

The update process is designed as a participatory and technical exercise. It begins with internal consultations across FIRA’s regional offices. These offices help identify changes in risk profiles, emerging threats, new productive chains or coverage needs that are not yet reflected in the matrix.

FIRA then prepares a technical proposal, which is submitted to the working group for review, validation or correction. The process culminates in a detailed review meeting where proposed changes are assessed against technical criteria, industry needs and the availability of insurance products in the market.

The diagram summarizes this workflow: regional consultations, technical preparation by FIRA, review by the working group, incorporation of approved changes and public dissemination of the updated matrix.

Once updated, the matrix is made available through a public microsite. This promotes transparency and allows producers, insurers, financial intermediaries and other stakeholders to access relevant information.

Insurance Policy and Credit Operations

FIRA’s insurance policy is closely linked to its guarantee service. When financial intermediaries use this service, they must comply with specific insurance requirements within the credit process.

This means that insurance is not treated as an isolated product. It becomes part of the credit structure and supports the protection of:

• The producer
• The financial intermediary
• The credit operation
• The guarantee mechanism

Financial intermediaries must include the required insurance documentation in the credit file. FIRA can then verify, through supervision processes, whether the insurance policies are aligned with the minimum risks defined in the matrix.

Q&A Session

• Is there an insurance offer available for all the minimum risks included in the matrix?

Yes. The matrix seeks to link the minimum risks identified with the actual availability of insurance products in the market. Therefore, the risks included in the matrix have coverage available, at least among the insurers and actors participating in the working group.

• Does the matrix also make it possible to identify risks or chains for which there is not yet an insurance offer available?

Yes. One of the objectives of the process is to identify possible gaps between the coverage needs and the existing supply in the market. When FIRA detects a growing production chain or an unmet need for coverage, it presents the case to the working group. If it is confirmed that there is no insurance product available, it is hoped that participating insurers or insurance funds will be able to develop a specific solution to meet that need.

• Do financial intermediaries use the matrix and is it linked to the integration between credit and insurance?

Yes. The matrix is linked to FIRA’s insurance policy and must be observed by financial intermediaries in credit operations that have a guarantee service. In these cases, the matrix functions as a reference element to integrate the insurance within the credit process.

• What is the level of disaggregation of risks in the matrix, especially for livestock, fishing or aquaculture activities?

The matrix presents coverage at a general level of risk, without additional disaggregation by specific disease, species, geographic subzone, or other more detailed level. However, the insurance products offered by each insurance company may include more specific coverage according to its own conditions and commercial designs.

• Does the process of updating the matrix include the direct participation of producer organizations or other actors in the territory?

Currently, the direct participation of producer organizations is not part of the formal updating process. However, FIRA collects regional needs through its territorial offices, which maintain direct contact with producers, companies, insurers, suppliers and other local actors. It was recognized that more direct involvement of producer organizations could strengthen the process in the future.

• How should the concept of “dispensation” be understood within the insurance policy?

The exemption refers to the possibility of not requiring the contracting of agricultural insurance as part of the credit, provided that there is a valid technical and financial justification. In these cases, the borrower is not required to present an insurance policy in the credit file, provided that they meet the criteria established for exemption.

• Have the waiver methodology and assurance policy evolved gradually?

The insurance policy and the waiver methodology are recent instruments, in force since October 2024, and so far they have had few adjustments compared to their initial design. Its application has been gradual, starting with certain agricultural chains, particularly fruit and vegetables, and later extending to other activities such as shrimp; In the future, new chains could be incorporated if the needs of the sector require it.

• Do the challenges in articulation with banks and in the use of collateral also have a regulatory dimension?

Yes. Although the working group has the participation of public actors, insurers and financial intermediaries, it does not yet directly include the regulator of the insurance sector. It was recognized that several of the challenges posed by financial intermediaries have regulatory implications and could benefit from the participation of the regulator, especially to address aspects related to guarantees, commissions, provisions and insurance operations.

• Who defines the minimum coverage required and how does it become mandatory within credit operations?

The minimum coverage is defined by mutual agreement within the working group, based on the minimum risks that must be included in the insurance policies associated with FIRA’s credit operations. Its mandatory nature is established through the guarantee service regulations, which require financial intermediaries to observe the matrix and keep the insurance policy as part of the credit file. In the supervision processes, FIRA can review these files and verify that the policies are aligned with the parent company; In the event of non-compliance, the lack of insurance or a valid justification for not applying it may constitute a cause for non-payment, partial redemption or total redemption of the guarantee.

• How is it operationally verified that the insurance policies comply with the minimum risks established in the matrix?

The verification is not carried out prior to the granting of the credit or guarantee, but through an ex post and sample supervision process. FIRA regulations establish that the credit file must include the insurance policy aligned with the insurance policy. Subsequently, during the supervision processes, FIRA can review the files of financial intermediaries and identify possible inconsistencies in the policies presented.

• What mechanisms has FIRA developed to promote the integration between agricultural credit, guarantee and insurance?

The main mechanism identified is the multidisciplinary working group, which brings together actors linked to credit, guarantee, insurance and agricultural public policy. This space allows the perspectives of financial intermediaries, insurers, public entities and FIRA to be articulated, facilitating a more comprehensive vision of risk management and strengthening the connection between the granting of credit, the support of guarantees and the contracting of insurance.

• Has FIRA evidenced with data whether the combination of credit, guarantee and insurance modifies the risk profile of the credit or the interest rate for the producer?

As indicated during the exchange, there is currently no differentiation in the interest rate or in the conditions of the credit due to the fact that an operation has insurance or not. In this sense, no specific measurement was identified that shows changes in the credit risk profile or in the rate applied to the producer associated with the integration between guarantee and insurance.

• How does FIRA make it easier for financial intermediaries to comply with the review of policies and the integration between credit, guarantee and insurance?

FIRA does not carry out pre-validation on a transaction-by-transaction basis, but relies on the soundness of the credit processes of financial intermediaries. When incorporating an intermediary to operate directly with FIRA, its credit process is reviewed and analyzed; based on this evaluation and other variables, their risk profile is determined. Therefore, the obligations associated with the use of FIRA’s services lie in the intermediary’s ability to properly apply the regulations within its own credit process, which must be sufficiently robust to integrate the corresponding documentation and requirements.

Key Takeaways

The exchange showed that risk matrices can play an important role in strengthening agricultural finance. When linked to credit, guarantees and insurance, they can help institutions move toward more transparent, risk-informed and resilient financing models.

FIRA’s experience also underlined that the effectiveness of such tools depends on collaboration. A matrix is strongest when it is built and updated through technical dialogue among public institutions, financial intermediaries, insurers and territorial actors.

For FINAGRO and other public development banks, the session provided practical insights on how to design, update and operationalize risk matrices in ways that support better decision-making, improve the use of insurance and strengthen resilience across agricultural value chains.