Weather-based index insurance is an innovative financial product that allows smallholder farmers, financial institutions, and even governments to hedge against production risk related to adverse weather events such as drought, flood, or frost. This financial innovation holds significant promise for rural households, but voluntary uptake by households has been disappointingly low.
In this talk Xavier Giné will draw on recent research to discuss the reasons for this low uptake and the trade-offs involved in the design of insurance contracts. He will also highlight how design choices shape market dynamics and the implications this has for Bank operational work.
Last Updated: Mar 23, 2015