Index-based agricultural insurance has significant potential for welfare impacts. Research shows that it can reduce how much households must cope by selling off productive assets to get by or with costly reductions in their consumption that can have long-term consequences for their future generations. However, the potential of this innovative type of insurance can only be realized if the index insurance products on the market are of high quality and have demonstrated value for clients. 

In this presentation for the 13th International Microinsurance Conference in Lima, Peru on November 9, 2017, AMA Innovation Lab assistant director Tara Chiu discussed the proven impacts index insurance can have on small-scale farmers in developing economies and the importance of ensuring that only quality products are made available on the market.