Enabling Policy Environment

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Government institutions provide support to develop the market for innovative extreme weather insurance and adopt the regulatory and institutional frameworks so that these kinds of insurance products can be promoted. Challenges related to this objective are: Lack of an effective regulatory environment for establishing products as parametric index insurance exists in the region; the current Insurance Acts in the target countries do not address weather-based index insurance. Previous market failures in the Caribbean have resulted in extra vigilance and caution being exercised by the regulatory...
Competitive markets are best geared to respond to farmers’ need and offer tailor-made insurance products. It is the government’s responsibility to ensure a level playing field. This is particularly important in countries where state-owned insurers compete with the private sector. Policymakers and the regulator have to create a framework that provides all market players, public and private, the same access to infrastructure and services, such as access to data on weather or agricultural production. In countries where premiums are subsidized, all insurance companies have to be eligible to...
There is a range of reasons for establishing agricultural and climate risk insurance, including adaptation to climate change, food security, disaster risk management or social protection. Regardless of the motives, however, creating an effective insurance system inevitably cuts across various political spheres. Thus, the first key element is to create a broad consensus amongst policymakers and their commitment to creating an enabling policy environment. This includes the integration of agricultural and climate risk insurance into respective national policies, strategies and action plans...