Pairing drought-tolerant maize (DTM) and index insurance generated resilience in two ways. DTM effectively maintained yields during mid-season droughts. After severe droughts, DTM bundled with insurance helped farmers recover from their losses and return production to even higher levels than in the year before the drought.
The AMA Innovation Lab is leading a pilot in Tanzania that bundles drought-tolerant maize with index insurance for seed replacement. Adoption rates and the effective triggering and distribution of in-kind payouts suggest this bundled approach could be successfully scaled more broadly.
A randomized controlled trial (RCT) in Burkina Faso showed that farmers who purchased insurance made significantly more investments for higher future income despite implementation challenges, adding evidence for the high potential of agricultural index insurance for development.
The Global Action Network was launched with the hopes that drawing together key stakeholders and change agents could identify important gaps in knowledge or capabilities, and then innovate solutions to these problems and create resources to address them.
The Global Action Network (GAN), a collaboration between the AMA Innovation Lab and the ILO’s Impact Insurance Facility, has just released a “3-D” Client Value Assessment tool that provides a multi-dimensional measure of an insurance contract’s total value proposition for existing or potential clients.
Households have no way to tell whether an index insurance contract will leave them worse off than having no insurance at all. A Minimum Quality Standard (MQS) for index insurance would help to secure vulnerable households and to safeguard markets for future higher-quality contracts.
A resilience-based approach to social protection that includes insurance is the only sustainable way to manage poverty in the long-term. However, even this approach will fail if worst-case climate change scenarios come to pass.
The study on a hypothetical area yield index insurance contract in Ecuador found that for most farmers in the sample, the area yield index insurance would have performed equally well or much better at the same dollar-for-dollar cost compared to the existing conventional insurance contract.