Some implementing partners may have little or no reinsurance and actuarial modeling experience. They may also have little or no experience developing agriculture (index) insurance and reinsurance policy wordings. To fill this knowledge gap, GIIF technical partners such as Swiss Re Corporate Solutions, assist GIIF implementing partners in building the technical capacity – product design, underwriting and pricing; and also provide technical support in developing insurance and reinsurance contract documentation. They also help explain reinsurance technical issues to the insurance regulators.
GIIF technical partners also include other specialist organizations such as research institutes, data providers and (weather/agrometeorological) data modelling, and meteorological agencies. Limited ground weather data and infrastructure motivates GIIF and implementing partners to seek collaborations with agencies specialized in remote sensing and technical specialists with special skills in satellite data processing and product design. Most of the GIIF implementing partners are using a mix of ground-based weather stations and satellites images. Ground weather station data can be used directly to trigger payouts or for verification of localized micro climates. The use of satellite data is imperative given the low weather station density and significant micro-climatic patterns in most developing countries, and most weather stations in developing countries do not have the required extensive historical weather data needed for actuarial analysis to design insurance products.
In Africa, for example, which covers a fifth of the world’s total land area, the density of the continent’s ground weather stations is much lower than the minimum recommended by the World Meteorological Organization. In addition, the weather station infrastructure has also been deteriorating over the last decade with an estimated one in four weather stations not working properly. Efforts are being made by GIIF partners and governments to improve ground observations but satellite data is critical to the need for temporal and spatial coverage of weather information.
There are many types of satellite-derived products available, each with their own location-specific advantages and disadvantages. In order to create robust and accurate index insurance products, it is critical that these partners have reliable ways to measure or estimate crop growth and loss due to weather over large areas. This is not possible using only rain gauges and crop-yield data, but can be accomplished with expansive agrometeorological remote sensing datasets. However, it is important to use the best information from multiple sources to get the most reliable and accurate account of ground conditions. Hybrid index products are proving the best designs and rely on a combination of weather stations, area yield data and satellite data.
GIIF and implementing partners work with a variety of satellite technology and contract design specialists who work with weather and catastrophic data from Meteosat, NASA and JAXA to design index insurance products. Most satellite sensors measure rainfall and vegetation but there are also research attempts to examine evapo-transpiration, temperatures and soil moisture. Technical partners working with GIIF implementing partners include:
Through these technical partners, innovative weather and catastrophic data solutions - combining ground data through weather stations and satellite technology - are being tested. High quality data is important but just as important are high quality climate services and trained specialists to connect the weather data to practical applications on the ground.