Index Insurance Forum

Product Pricing

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In Mozambique, agriculture accounts for approximately 32% of GDP and involves over 81% of the population (CIA, 2012). Yet, only a fraction of Mozambique’s potentially arable land is currently under cultivation.
In Kenya, where more than 96 percent of agricultural land is rain-fed and vulnerable to drought and erratic rain, mitigating weather-related risks for smallholder farmers is an important tool for unlocking credit.
Haiti is one of the most disaster-prone countries in the world with earthquakes, hurricanes and flash floods.
PlaNet Guarantee has designed various index insurance products in Benin, Burkina Faso, Mali and Senegal. The project works with Banks, MFIs, Cooperatives and NGOs as main distribution partners in these countries.
MicroEnsure operated two main weather index insurance products in Rwanda: 1) Weather station-based product that provides coverage against dry spells and excess rain. To insure against the effects of dry spells, cumulative rainfall is measured daily over a pre-determined period (typically between 30 and 45 days). If the cumulative rainfall falls below a set threshold for the period, a payout is made. 2) Satellite-based product that also provides coverage against dry spells and excess rain. Cumulative rainfall over a number of consecutive decades (typically three decades for dry spells and one...
Guy Carpenter’s index insurance is distinguished by several unique features, including its use of a “portfolio pricing” model where the sum insured in a given region forms the basis for risk calculation. Compared to the alternative where each individual plot is priced separately, this method can result in lower premium costs by including more farmers and diverse areas in a group.
IFC will provide advisory services to PT. Reasuransi MAIPARK Indonesia (a specialist reinsurance company in Indonesia) in the following areas: (i) support technical design and development of an earthquake index insurance (EQII) product; and (ii) build capacity of PT. Reasuransi MAIPARK Indonesia and selected financial institutions to administer, price, and distribute the EQII product in retail.
The Sygenta Foundation for Sustainable Agriculture launched ACRE in June, 2014, a commercial company created to advise on protection for African smallholders. The Agriculture and Climate Risk Enterprise (ACRE) will continue the Foundation’s drive with ‘Kilimo Salama’ to reduce the burden of weather and other risks for small farmers.
The soil that Abdoulaye Ndiaye holds in his hand is dry and dusty. A little further away in the Kaolack region the groundnut plants are already beginning to spring up in the fields, but in Paskoto village Abdoulaye and his fellow farmers have not seen a drop so far this season. "The most important challenge for us is the weather. It is God who decides. We have no choice, but are just left looking for ways to handle the situation," Abdoulaye says, now using his hand to shield his eyes against the stark sunlight.
For Jeremiah Kithaka, farming maize on his three acre farmland is the primary source of livelihood enabling him to provide for his family of four. However, with changing rainfall patterns, delayed starts to the rainy seasons and longer and more frequent dry periods, Jeremiah has seen vast volatility in his income levels over the past few years.
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