Colombia

Overview

Colombia is highly geologically complex, with about 86% of the population living in seismic hazard zones, and the country has the second-highest level of biodiversity in the world. Climate change is worsening risks for people and for ecosystems. But risk management mechanisms and insurance culture are still incipient; insurance penetration is 3.2% of GDP, and insurance for rural populations is just 8% of that total. Microinsurance targeting low-income groups accounted for 2.1% of premiums written in 2022. Greater attention to vulnerable groups can ensure better protection, while allowing the insurance industry to diversify and innovate in its product portfolio.
UNDP is facilitating insurance development in Colombia, together with insurers, reinsurers, intermediaries, government institutions, regulators, clients and strategic partners.

Main Natural Hazards

Earthquake, Tsunami, Flood,

Cyclone

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¹
Source:

https://drmkc.jrc.ec.europa.eu/inform-index/INFORM-Risk/Country-Risk-Profile}

Insurance penetration

3.2% (2022)

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¹
Source:

https://www.economiayseguromapfre.com/number-12/the-latin-american-insurance-market-in-2022/}

Number of insurance providers

20 life insurance companies and 23 non-life insurance companies; 22 insurance companies offer microinsurance and 31 offer mass insurance

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¹
Source:

https://irff.undp.org/sites/default/files/2023-11/summary-country-diagnostic-colombia.pdf}

% Workforce engaged in agriculture

15% (2022)

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¹
Source:

https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS}

Multidimensional poverty

4.8% (2015/2016)

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¹
Source:

https://hdr.undp.org/system/files/documents/hdp-document/2023mpireporten.pdf}

% of population covered by inclusive insurance products

16%

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¹
Source:
The Microinsurance Network, Landscape of Microinsurance 2023, Based on target population estimate for Colombia of 38,922,789 people
https://microinsurancenetwork.org/resources/the-landscape-of-microinsurance-2023}

Biodiversity ranking

#4 out of 239 countries and territories (2023)

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¹
Source:

https://worldrainforests.com/03highest_biodiversity.htm}

Small business % contribution to workforce

79% of total employment (2024)

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¹
Source:

https://www.bbvaresearch.com/en/publicaciones/colombia-a-review-to-micro-and-smes-in-colombia/}

Our work in numbers

4.6

Million projected beneficiaries

Reaching people through insurance and risk finance solutions.

4

Insurance solutions in development

Protecting people, jobs, agriculture and public assets.

3

Institutional and policy processes

Strengthening the enabling environment for insurance to scale.

300

Training programme participants

Building country capacity in insurance and risk finance.

Our projects

Building rural financial resilience
A tailored parametric insurance solution has been designed for livelihood protection for smallholder/non-bankable farmers in six departments/states, to reduce the protection gap related to climate risks such as extreme precipitation and drought. A fast, direct payout system for vulnerable smallholder farmers is under development. The project is supported through the Tripartite Agreement (TPA), a public-private partnership between UNDP, 20 of the world’s largest insurers under the Insurance Development Forum, and the German Federal Ministry of Economic Cooperation and Development (BMZ).
UNDP is also helping to develop a capacity-building module for sustainable agriculture practices and associated financial mechanisms.

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Increasing actuarial capacity to improve financial risk management
The UNDP Milliman Global Actuarial Initiative (GAIN) aims to help countries predict and prepare for risks by increasing actuarial capacity, enabling better risk modelling and more accurate pricing of insurance and social protection mechanisms. The GAIN initiative is working to improve actuarial training in Colombia through training programmes, mentorship opportunities and support for actuarial professionals.

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Protecting biodiversity and small businesses through innovative insurance
In cooperation with BIOFIN, the Biodiversity Finance Initiative, UNDP is implementing an Innovation Challenge in Colombia, bringing together the insurance industry, including insurers, reinsurers, commercial banks, NGOs and environmental associations, to develop a minimum viable insurance product for biodiversity investments. The challenge is focused on generating an insurance tool for nature-based solutions, habitat banking, natural capital protection and/or green solutions in the agricultural sector. The insurance tool should consider the specific dynamics of the business, the risk to be covered and its relationship to the insured green capital.
In a separate initiative, working with insurance association Fasecolda, Banca de las Oportunidades and the Ministry of Commerce, Industry and Tourism, UNDP is promoting insurance for non-agricultural productive units such as shopkeepers, small hotel owners and households as a key lever to generate resilience and financial well-being. The work involves cooperating with the private sector developing innovative insurance products, as well as developing education and research on inclusive insurance and risk management.

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Working with Finagro, Colombia’s Agricultural Development Bank, UNDP is designing a parametric product together with financial education module on risk and the use of agro-climatic practices to reach 5,100 small farmers in climate change-vulnerable areas.
With the Women Protected Programme of the Vice-Presidency of the Republic, UNDP is supporting the development of a project to protect 4,100 women’s productive units through parametric insurance offering coverage for droughts, excess rainfall and earthquakes in rural and urban areas. UNDP is working with the private sector to provide financial education for women’s associations.
UNDP is innovating in producing data for the Financial Inclusion National Demand Survey, focusing on behavioural sciences and prototyping, in cooperation with the Lab Accelerator.