Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Challenges for use of index‐based weather insurance in lower income countries

Challenges for use of index‐based weather insurance in lower income countries This article offers some perspective on the progress and challenges of managing catastrophic weather risk in lower income countries through the use of index insurance. Innovations in insurance for natural disaster risk are critically important to help the rural poor improve their lives and to contribute to the overall economic growth in lower income countries. By reviewing lessons learned from various index insurance projects, several conclusions are made about how best to approach weather risk management to benefit the livelihoods of the rural poor. It is important to recognize the limitations of index insurance and that it is not a substitute for crop insurance. However, using index insurance to address catastrophic risk can serve as the foundation for the development of broader financial services by removing one of the major constraints to market development. This in turn can offer households more effective strategies for consumption smoothing in the face of different sources and magnitudes of risk. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

Challenges for use of index‐based weather insurance in lower income countries

Jerry R. Skees
Agricultural Finance Review , Volume 68 (1): 21 – May 5, 2008
Download PDF
21 pages

Loading next page...
 
/lp/emerald-publishing/challenges-for-use-of-index-based-weather-insurance-in-lower-income-18JldD1i6W
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0002-1466
DOI
10.1108/00214660880001226
Publisher site
See Article on Publisher Site

Abstract

This article offers some perspective on the progress and challenges of managing catastrophic weather risk in lower income countries through the use of index insurance. Innovations in insurance for natural disaster risk are critically important to help the rural poor improve their lives and to contribute to the overall economic growth in lower income countries. By reviewing lessons learned from various index insurance projects, several conclusions are made about how best to approach weather risk management to benefit the livelihoods of the rural poor. It is important to recognize the limitations of index insurance and that it is not a substitute for crop insurance. However, using index insurance to address catastrophic risk can serve as the foundation for the development of broader financial services by removing one of the major constraints to market development. This in turn can offer households more effective strategies for consumption smoothing in the face of different sources and magnitudes of risk.

Journal

Agricultural Finance Review – Emerald Publishing

Published: May 5, 2008

Keywords: Ex ante risk management; Index insurance; Risk transfer; Rural development; Weather risk

There are no references for this article.