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Microinsurance innovations in rural finance

Wiedmaier-Pfister, Martina; Brigitte Klein, International Food Policy Research Institute (IFPRI), Focus Brief 18(12), 2010

Given the rural character of poverty in many countries, poverty reduction remains strongly connected to agricultural development, and sustainable agricultural development depends on well-organised risk mitigation. One important tool for mitigating risk is microinsurance.

This note, which is part of a 14 brief series that highlights rural and agricultural finance innovations, briefly examines the key challenges for the development of microinsurance markets in rural areas. Much has been learned about developing effective and broad-based microinsurance markets in the past few years, but a number of challenges still face efforts to extend microinsurance in rural areas.

Click here to download note or here to view whole series

Microinsurance against drought risk in a changing climate: Assessing demand and supply considerations

Hochrainer, Stefan; Reinhard Mechler and Daniel Kull, International Journal of Climate Change Strategies and Management: Volume 2 issue 2 p.118, Emerald Group Publishing Ltd, 2010

The purpose of this research paper, which is published in the "International Journal of Climate Change Strategies and Management", is to review and suggest ways to methodologically tackle the challenges regarding the assessment of drought risk and the viability of index-based insurance arrangements in the light of changing risks and climate change.

Based on novel modelling approaches, the authors take supply as well as demand side perspectives by combining risk analysis with regional climate projections and linking this to household livelihood modelling and insurance pricing. Two important examples in Malawi and India are discussed, where such schemes have been or are about to be implemented.

Click here to read full abstract

Feasibility study: Crop insurance for cotton producers in Mali

DeBock, Ombeline; Catherine Guirkinger, PlaNet Guarantee, April 2010

This case study, conducted by PlaNet Guarantee on the ILO's Microinsurance Innovation Facility funding, is a feasibility study of a microinsurance product designed for cotton farmers in Mali.

The study evaluated three types of indices for cotton: Weather-based index, which is based on rainfall alone, though it can incorporate multiple aspects of rainfall, such as periods without rain, late start of the rainy season, and excessive rain; Satellite based index (SBI), which measures "greenness", or the level of photosynthesis in vegetation, and estimated rainfall data to approximate farmers’ loss; District-level area based yield (DARBY) index measures representative data of the yields of all farmers in a geographic area.

The case study is currently only available in French but will soon be translated into English.

Click here to download study

Microinsurance - An innovative tool for risk and disaster management

Morelli, Emmanuel; Giorgio Amsicora Onnis; Walter J. Ammann and Corina Sutter, GRF Davos, 2010

Microinsurance - An Innovative Tool for Risk and Disaster ManagementThis new publication sets out to investigate the linkage between disaster risk reduction and microinsurance, and to address possible combinations of different financial services as appropriate risk reduction solution. It includes case studies and programmes that provide an overview of the different strategies used to provide risk reduction with particular attention to microinsurance tools that address natural disasters and unexpected hazards. The 15 articles, written by recognised microinsurance experts, are based on presentations made during the "International Disaster and Risk Conference IDRC 2008", Davos, Switzerland.

The book is structured in key note articles dealing with organisational risk management, climate change and the role of regulation, and case study chapters broken up in life, health and disaster microinsurance from, for example, Ethiopia, Indonesia, India and Bolivia. The life and health case studies are very concrete and written mostly by practitioners whereas the disaster articles are more theoretical and mostly based on academic research.

Click here for more information and how to order this book

Allianz launches 2010 microinsurance report

Aiming to share its experience in how to design, deliver and scale sustainable microinsurance products and to help set the right course for next steps, Allianz has published a new microinsurance report, 'Learning to insure the poor'.

The new report is based on research, conducted in collaboration with the Emergia Institute, to consolidate the wealth of insights Allianz has gained in the first years of developing its microinsurance business. Key facts on the state of microinsurance today, case studies on existing Allianz microinsurance projects and perspectives from experts on the future of microinsurance round out the report.

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Technology: A key asset to turn microinsurance into a sustainable sector?

Abby Gray, ILO's Microinsurance Innovation Facility, 2010

Microinsurance represents a promising new way to protect the poor, but reaching low-income markets sustainably requires creative new strategies. The ILO's Microinsurance Innovation Facility looks at how microinsurance providers are using technology to overcome the industry's challenges.

Ten years ago, it would have been difficult to imagine that a poor woman would file a claim and receive a medical diagnosis electronically from her home in rural India. The next ten years will undoubtedly bring new and equally unexpected technological developments – developments with the power to bring the security of microinsurance coverage to the two billion people who need it most.

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