Interview with Xavier Gine, Lead Economist within the World Bank Research Department (DEC). 1/ What do we know about index insurance after about 10 years of experience? There has been a lot of research around the question of take-up and impact of index insurance . Despite the potentially large welfare benefits, voluntary take-up of index insurance products has been rather limited so far. Explanations for this low demand could include: The first reason is that the product may be expensive , relative to the existing risk coping strategies. After all, when it is not subsidized as is the case for...

Previously published here on the World Bank Group's Private Sector Development Blog How governments can ensure that low-income farmers are financially protected against natural disasters, such as droughts, was at the heart of a panel discussion at the “ Global Index Insurance Conference ,” which concluded earlier this week in Paris. The panelists explored various options, such as the disaster reserve fund FONDEN in Mexico as well as three index-based insurance programs aiming to protect vulnerable farmers: the African Risk Capacity , the Kenya Livestock Insurance Program, and the Mexican...

The Global Index Insurance Facility together with the ILO's Impact Insurance Facility, USAID and BASIS/I4-sponsored Global Action Network (GAN), organised a webinar to look into the question "How can index insurance be bundled with other financial and non financial services". This webinar featured speakers from global organizations who shared experiences and discussed which services and activities in the agriculture value chain are most aligned for bundling. It explored mechanisms and issues in bundling, and also looked into the possible impact of bundling on pricing & off-take of index...

Having many Sri Lankan friends in my home country of Australia, I have always wanted to visit Sri Lanka. The image of beautiful green tea plantations comes to mind, and perhaps rightfully so. This May, I had the opportunity to visit and understand more about their Index Insurance market through the Index Insurance Forum – a community of practitioners working towards market development and scalability in Index Insurance. The visit was part of a peer exchange with SANASA , an insurance company in Sri Lanka and a partner of the World Bank Group’s Global Index Insurance Facility (GIIF). The...

What happens when a major national development organization – GIZ and a leading private insurer – Allianz SE get together to build innovation in micro-insurance? Watch full video of the event here Experts presented key insights on micro-insurance with a larger view on how these lessons learnt can be applied to other inclusive insurance projects and to various other sectors. The 60 minute session showcased case-studies ranging from how GIZ has assisted Allianz in turning a corporate responsibility charitable micro-insurance story into a fully-fledged and profitable micro-insurance business...

Last week, the United Nations’s Secretary General - Ban Ki-Moon, welcomed over 200 insurance representatives at the United Nations (UN) headquarters in New York for the 17-June UN Insurance Forum. During his inspiring speech, Ban Ki-Moon remarked that this was the first time that a UN Secretary General has ever met a congregation of global insurance leaders. He stressed that this was by no means a chance encounter and called upon the insurance industry to play a strong role in the quest for a more sustainable post-2015 world. He stressed that insurers should invest wisely into sustainable...

SEPTEMBER 14 and 15, OECD Headquarters, PARIS Climate risk and its impact has been an issue of key significance for the insurance industry. Risks are outlined for all eco-systems, societies, economies, industries and agriculture. Is Index Insurance the Solution? Index insurance is an innovative financial instrument to help poor smallholder farmers manage the increasing climate risks to their harvests. Index insurance will allow farmers to survive adverse weather or destroyed harvests and potentially open up agri-credit markets; enabling farmers to protect their assets and invest in their...

Can you give us some examples of key trade-offs that you have faced when providing technical support to the overarching policy discussion on regulation of index insurance in Kenya? The first trade-off that we have faced was in the definition of insurable interest. In the law of insurance, the insured must have an interest in the subject matter of his or her policy, or such policy will be regarded as a form of gambling. However, in Kenya most farmers do not own their land as they work on communal farms or as wage laborers. We therefore decided in our policy framework to define the insurable...

What do you think of the upcoming index insurance regulation in Kenya? Well, at this stage, I think we have drafted a policy paper which sets guidelines for the future regulations , however I believe that we have here an opportunity to enhance access to insurance in Kenya. What are the expected benefits? One of the key expected benefits is the creation of a consumer protection framework. This means that index insurance products will need to be explained very clearly and in a simple way, and all the contract terms (ex: triggers, reference weather stations, index design etc...) will have to be...

Bénin " L’assurance pour le champ, on se demande si c’est une vérité. Maintenant, c’est une réalité pour moi!” Premières indemnisations dans le cadre du projet GIIF d’assurance indicielle pour les producteurs de maïs du Benin “L’assurance pour le champ, on se demande si c’est une vérité. Maintenant, c’est une réalité pour moi!” . C’est avec grand enthousiasme que Bessekourou Issiaka, producteur de maïs de 38 ans du Nord du Benin, a reçu ses premières indemnisations sur sa police d’assurance indicielle. A cause de la faible pluviométrie de cette année, les rendements de certaines de ses...