SEPTEMBER 14 and 15, OECD Headquarters, PARIS Climate risk and its impact has been an issue of key significance for the insurance industry. Risks are outlined for all eco-systems, societies, economies, industries and agriculture. Is Index Insurance the Solution? Index insurance is an innovative financial instrument to help poor smallholder farmers manage the increasing climate risks to their harvests. Index insurance will allow farmers to survive adverse weather or destroyed harvests and potentially open up agri-credit markets; enabling farmers to protect their assets and invest in their farms

Can you give us some examples of key trade-offs that you have faced when providing technical support to the overarching policy discussion on regulation of index insurance in Kenya? The first trade-off that we have faced was in the definition of insurable interest. In the law of insurance, the insured must have an interest in the subject matter of his or her policy, or such policy will be regarded as a form of gambling. However, in Kenya most farmers do not own their land as they work on communal farms or as wage laborers. We therefore decided in our policy framework to define the insurable

“ I did not believe in crop insurance before, but now it is a reality for me”! It is with great enthusiasm that 38-year old maize farmer Bessekourou Issiaka from Northern Benin received the first payout on his weather insurance policy. Because of the lack of rain this season, some of his maize fields generated less than half of their usual yield, or 800 kg/ha instead of the usual 2000 kg/ha. He is therefore quite relieved to receive FCFA 90,000, about 180 dollar insurance payout which will help him repay the loan he took to purchase inputs for the maize production. Bessekourou Issiaka is one

“ We’re all Senegalese, and we should all have access to insurance” says Yoro POULO BA, a groundnut farmer from Ndoffane, a commune from the center of Senegal who just received insurance payouts as part of the GIIF-supported index insurance project. This year, the rains during the month of July - the sowing period for groundnut - were extremely low, therefore triggering automatic payouts for what is called “sowing failure”. The payouts that he has received amount to about 30% of the total insured amount, which is the amount of credit that he has borrowed for seeds and fertilizers needed for