Index-based agricultural insurance has offered the promise of overcoming the hurdles of traditional indemnity-based insurance for economic development. This paper describes how existing constraints on take-up can partially be overcome using revised contract designs, advanced technology for better measurement, improved marketing and better policy.
This paper addresses the reasons for this current discrepancy between promise and reality. We conclude on perspectives for improvements in product design, complementary interventions to boost uptake, and strategies for sustainable scaling up of uptake.
Though widely heralded, this effort to create rents in an otherwise competitive market is unlikely to succeed. By analyzing two ways in which the mechanism is undermined by arbitrage: over-certification and quality-invariant pricing.