The potential for scale and sustainability in weather index insurance: for agricultural and rural livlihoods

The Weather Risk Management Facility, a joint undertaking of IFAD and WFP, reviewed a range of recent experiences with index insurance programmes around the world, analysing the key actors, features of the products, and their successes and challenges. These pilot programmes have demonstrated the great potential of index insurance as a risk-management tool.

Highlighting some disaster risk reduction activities, they suggest that index insurance could not only provide an additional effective, market-mediated solution to promote agricultural development, but it could also make disaster relief more effective. As such, index insurance can benefit clients beyond agricultural producers: governments, relief agencies, financial service providers, input suppliers, businesses, agricultural processors, food companies, farmers’ organizations and producers’ associations could all use index insurance.