Since the World Bank Group first forayed into index insurance in 2000, the financial instrument has been widely accepted as an innovation that helps small players gain access to finance and sustain their livelihoods. In the context of climate change, index insurance has helped vulnerable populations build resilience and protect themselves against catastrophes and climate risks.
Index insurance pays out benefits on the basis of a pre-determined index for loss of assets and investments resulting from weather and catastrophic events. Without requiring the traditional services of insurance claims assessors, index insurance allows for settlements to be quicker and more objective. Since 2009, the Global Index Insurance Facility (GIIF) has been supporting the development and growth of local markets for many types of index insurance, ranging from livestock index in Kenya, to weather index in Bangladesh, to earthquake index in Indonesia.
New data has shed a new light on the impact of index insurance – the impact on women.
As GIIF specialists collect information and assess results from active projects, stories emerging from the fields share one common thread: index insurance has made significant changes in the lives of female farmers.
Index insurance helps women protect their household and eradicates poverty risks.
In Kenya, Jacinta Mutuse, a 35-year-old farmer received an automatic US$9 payout after having purchased and planted two bags of maize seeds with a replanting guarantee that covers the risk of poor rainfall during the germination phase. This mother of one used the money to meet family needs and secure a food supply ahead of the worsening drought.