Index insurance is a promising idea in regards how it handles transaction costs and moral hazards. Nevertheless, in practice, there has been low uptake despite efforts of pushing use of the idea. Low adoption have been primarily due to lack of trust, understanding, and design of the index itself. Another challenge has been how basis risk is perceived by farmers. A misunderstanding between farmers and index insurance is the perception index insurance almost works like a lottery, which is not how index insurance works.
This presentation is based on the AMA Innovation Lab projects for an I4 technical meeting in Rome, Italy. This conference brought together researchers and stakeholders of involved in the global initiative towards Index Insurance.
This presentation took place at Rome, Italy on June 13, 2012.