Innovations and emerging trends in agricultural insurance
Index based insurance is a promising innovation that might yet help scale up agricultural insurance to needed levels, as well as help underwrite many public relief programs. It also promises to be a useful bridge for increasing the engagement of private insurers in managing these risks, either directly or through various kinds of public-private or nonprofit-private partnerships. Yet despite many promising pilots, IBI has not yet taken off at scale. There are a number of challenges holding back IBI, including problems of weak farmer demand, difficulties in developing appropriate indices and distribution networks, coping with climate change, insufficient public investments in necessary public goods, and first mover problems. This paper (PDF) has reviewed some recent innovations that seek to overcome these challenges, and some are indeed showing promise in ongoing pilot projects.