South Asia

Lending Stability to the Farming Structure in Sri Lanka
For eight years, Chandrasiri Vanasunder, a small holderfamerin the Ratnapura district of Sri Lanka, bore the lossescaused by drought and excess-rainfall on his 2-acre teaestate. But all that begun tochange in 2012, when a salesrepresentative from Sanasa told him about ‘index-basedinsurance’ for tea plants. “As soon as I heard about theproduct, I knew that this was a good product. I have sufferedsevere losses in the past, and this seemed like a smart ideato help me prepare for future uncertainty.” Vanasunder’sjudgment proved right, as approximately half -way throughthe last season, he received
5th Annual Africa Insurers and Reinsurers Conference
The 2015 Africa Insurance & Reinsurance Conference will keep you up-to-date with the latest industry developments, marketing strategies and product innovations relevant for the African market. New technologies, development of new client segments and the overall economic growth in the continent is not only forcing regional insurers to rethink the way they conduct business but also forcing the global players to look at Africa as a strategic market for growth.At the 4th Annual Africa Insurance and Reinsurance Conference, will focus on key fundamentals to the business of insurance and discuss how
Agriculture Insurance Conference - How can we make it work to contribute to food security?
The Conference will focus on how agricultural insurance and food security are linked and how this link is relevant for future development efforts. It will sharpen the understanding under what circumstances and how agricultural insurance can best contribute to food security and provides a platform to share experiences. The Conference welcomes food security and agricultural insurance experts, development organizations, insurance policy makers and regulators, academia and representatives from the private sector. View AIC 2014 panelist interviews here.
IFC, SANASA Insurance Contribute to Food Security in Sri Lanka through Weather Insurance
IFC, a member of the World Bank Group through its Global Index Insurance Facility (GIIF), has entered into a project agreement with SANASA Insurance Company Ltd, to support the development and use of flexible and affordable weather index insurance products to help minimize the impact of crop losses due to floods or droughts on farmer livelihoods. The project objective is to expand access to insurance for food crops such as rice and in turn offer protection for up to 15,000 small-scale farmers against weather-related risks and natural disasters. The project will also raise awareness amongst 50
Index Insurance for Developing Countries
Unlike conventional insurance, which indemnifies policyholders for verifiable production losses arising from multiple perils, index insurance indemnifies policyholders based on the observed value of a specified “index” or some other closely related variable that is highly correlated with losses. Index insurance exhibits lower transaction costs than conventional insurance, potentially making it more affordable to the poor in the developing world. However, it also offers less effective individual risk protection. This article provides a review of recent theoretical and empirical research on index insurance for developing countries and summarizes lessons learned from index insurance projects implemented in the developing world since 2000
How Can Rainfall Insurance help Dryland Farmers?
About 65% of the cropped area in India is dependent on rains. Because most of the rains in India are received during the monsoon months, the crop growing seasons are quite short. Any aberrations in the amount of rainfall or in its distribution can adversely impact the crop yields. Yield and price uncertainties often reduce the incomes of the farm households and, consequently, their consumption levels and investments. Many of the farmers in the semi-arid tropics (SAT) of India live close to subsistence level, and shielding them from the weather-induced shocks in agricultural income is vital for their survival. The SAT accounts for 37% of the country’s geographical area as well as population, 46% of the net cultivated area, 59% of the coarse cereals area, 53% of the pulses area and 60% of the oilseeds area. Even 60% of the commercial crops are grown in the SAT. If rainfed agriculture in the SAT is to remain as a means of livelihood, ex-ante risk management is a critical first step to ex-post risk coping.
Enhancing Crop Insurance in India
The broad structure of National Agricultural Insurance Scheme (NAIS), the main crop insurance program in India, is technically sound and appropriate in the context of India. The NAIS is based on an indexed approach, where average crop yield of an insurance unit, IU, (i.e., block) is the index used. The insurance is mandatory for all farmers that borrow from financial institutions, though insurance cover is also available to non-borrowers. The actual yield of the insured crop (as measured by crop cutting experiments) in the IU is compared to the threshold yield. If the former is lower than the latter, all insured farmers in the IU are eligible for the same rate of indemnity payout. Individual crop insurance would have been prohibitively expensive, or even impossible, in a country such as India with so many small and marginal farms. Further, the method of using an ‘area based approach’ has several other merits and, most importantly, it mitigates moral hazard and adverse selection.
China: Innovations in Agricultural Insurance
China is the world's most populous country and one of the largest producers and consumers of agricultural products. It produced crops and livestock valued at $366 billion in 2004, about 50 percent more than the U.S. total. Despite limited supplies of land, water, and other natural resources, China grows most of its own food and is a major exporter of many agricultural commodities. China ranks number 1 in the world in rice paddy production with over 40 percent more production than India which ranks number 2. Importantly, China also ranks number 1 in the world in fresh vegetable production with 4 times more production than India which ranks number 2 again. China is also the largest wheat producing country in the world. In total, China ranks number 1 in the world in the production of 45 agricultural commodities (FAO, 2005).
In 2011, the World Bank Group and Partner Sanasa Insurance Company Ltd. (SICL) , supported by the Global Index Insurance Facility (GIIF), started working on stimulating the weather-related index insurance market in Sri Lanka through a combination of capacity building and awareness raising activities at both the institutional and the smallholder farmer levels.

Agricultural insurance was introduced in Nigeria in 1987 through the creation of the Nigerian Agricultural Insurance Scheme (NAIS). In 1993, the private company in charge of underwriting and implementing the NAIS was dissolved and replaced by a public-sector corporation, the Nigerian Agricultural Insurance Corporation, NAIC. Currently, NAIC writes a portfolio of crop, forestry, livestock, poultry and aquaculture insurance and also non-life commercial insurance lines. NAIC has received government support both in the form of the initial capitalization of the company and 50% premium subsidies on