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We show theoretically that the presence of basis risk in index insurance makes it a complement to informal risk sharing, implying that index insurance crowds-in risk sharing and leading to a prediction that demand will be higher among groups of individuals that can share risk. We report results from Ethiopia from a first attempt to marketweather insurance to informal risk-sharing groups.
Full Publication Microinsurance is a unique topic for a Lloyd’s 360 Risk Insight report. Usually, we advise businesses on managing emerging risks but this report focuses more on opportunity than emerging risk. Produced by Lloyd’s and the MicroInsurance Centre, this report sets out the understanding, mechanisms and partnerships needed to deliver insurance to three billion low income individuals across the globe, and how this will bring benefits to both the developing world and the insurance industry. Microinsurance is not charity, it is business, but it will require insurers to change their...
Full Publication Mobile communications can help to meet the challenge of feeding an estimated 9.2 billion people by 2050. The 12 specific opportunities explored in this study could increase agricultural income by around $138 billion across 26 of Vodafone’s markets in 2020. Connected agriculture could also reduce carbon emissions and reduce water consumed in irrigation. This report, co-authored by Accenture, Vodafone and Oxfam, aims to stimulate the necessary engagement between mobile operators, governments, non-profits and businesses to realize these opportunities and explore others.
Full Publication This pre-feasibility report was prepared for the Ford Foundation by Jason Hartell of GlobalAgRisk, Inc., Ntongi McFadyen of the Livelihoods Department of Save the Children, USA, and Jerry Skees of GlobalAgRisk, Inc., under Ford Grant No. 1100-0121 and IIEF Program No. FF-5H016. GlobalAgRisk is a policy-oriented firm with close ties to the University of Kentucky. Our work is supported by international donors who recognize the importance of markets in transferring natural disaster risk as a means for developing and enhancing access to financial service by the productive poor...
This Masters thesis presents the results of a pilot scale study on weather index-based rice insurance in Zhejiang province, China. The goal of this thesis is to find the best suited weather index-based rice insurance model for each rice cropping zone of Zhejiang. By testing a wide range of weather indexes for their relationship with the rice yield per unit land in each rice cropping zone using classic regression models, a set of weather indexes were selected for each rice cropping zone of Zhejiang. A rice insurance product was then designed based on the relationship between the chosen weather index and rice yield. Basis risks were studied in detail in this thesis, and were reduced in the insurance model by defining the insurable farming scale to rice cropping zone and by removing the time trend in rice yields. The results show diversified features in weather index and insurance product design of different rice cropping zones in Zhejiang.
Food prices for wheat, maize, corn or soybeans have risen in the last 18 months markedly, mainly as a result of a growing imbalance between supply and demand for agricultural products. Since 2000, prices for food have nearly doubled around the world. The supply side is not keeping up with the increase in demand. Direct investments into agriculture production are still remarkably low. This issue is being addressed at both the national and international level. For example, within the Commonwealth, Ministers of Finance, at their Annual Meeting in October 2008, called on the international community to intensify its support for affected countries and to accelerate both short and longer term investments in increasing agricultural production and productivity.
This interim summary report has been produced by Aon Limited and ESYS plc under contract ESRIN/Contract No. 17814/03/I-LG: Earth Observation Responses to Geo-information Market Drivers – Insurance Segment. It summarises three deliverables on the use of geo-information in the insurance industry.
The Moisture Stress Index for corn and soybean crops is a measure of the effects of drought and catastrophic wetness on national crop yield and is calculated through the use of a drought index (the Palmer Z Index) and annual average crop productivity values within each U.S. climate division. Moisture stress, either a lack or an abundance of soil moisture during critical phases of the crop growth and development cycle, affects US average crop yield, particularly when moisture stress occurs in the most highly productive crop growing areas. Soil moisture conditions in July and August were found to be the best indicators of average crop yield for corn and soybeans, and as such, are used in creating the Moisture Stress Index.
Agricultural insurance in developed countries originates in named peril products that were originally offered by private companies approximately two hundred years ago, first in Europe and then in the United States. Today, many agricultural insurance products are offered, most of them heavily subsidized by governments. In the context of developed economies, this article examines the evolution of agricultural insurance products, the economics of the demand and supply sides of agricultural insurance markets, and the economic welfare, political economy, and trade relation implications of private and public agricultural insurance in developed countries.
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).