Is agricultural insurance fulfilling its promise for the developing world?

Kramer, Berber; Alderman, Harold; Ceballos, Francisco; Kumar, Neha; Timu, Anne G.

doi:10.2499/p15738coll2.134751

Cited by 5 publications

(4 citation statements)

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“…A priority for designing gender-responsive insurance products is therefore understanding how insurance costs and benefits are distributed among men and women; not just by comparing male-and female-headed households, but also comparing outcomes within households. This can be achieved by collecting gender-disaggregated individual-level data and conducting holistic gender-based needs assessments, impact assessment studies and long-term monitoring of impacts at individual levels (IFAD, 2020; Kramer et al 2021).…”

Section: Gendered Distribution Of Costs and Benefits Of Agricultural ...mentioning

confidence: 99%

Gender-inclusive, -responsive, and -transformative agricultural insurance: A literature review

Timu

Kramer²

2023

Global Food Security

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Section: Gendered Distribution Of Costs and Benefits Of Agricultural ...mentioning

confidence: 99%

Gender-inclusive, -responsive, and -transformative agricultural insurance: A literature review

Timu

Kramer²

2023

Global Food Security

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“…They are estimated using statistical sampling such as random crop cuttings or average pasture damage based on satellite observations. An example of a typical weather index insurance product is the one to insure Belgian barley farmers against excessive unseasonal rains (Kramer et al, 2021). The insurers use the maximum accumulated rain (in millimeters) over any two consecutive days during February through April as the index that could trigger a payment.…”

Section: Literature Review Capacity Building For Agriculture Insuranc...mentioning

confidence: 99%

“…The insurers use the maximum accumulated rain (in millimeters) over any two consecutive days during February through April as the index that could trigger a payment. And that happens when the index takes a value equal to or higher than a number called the index strike (Kramer et al, 2021). The higher the index value, the higher the compensation per acre to the farmer up to a maximum that reflects the cost of production per acre.…”

Section: Literature Review Capacity Building For Agriculture Insuranc...mentioning

confidence: 99%

Capacity Building for Agriculture Insurance: Lessons From Developed Economies

Kajwang¹

2022

AJA

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Purpose: Agricultural insurance has been offered in some developed economies for more than a century. In contrast, the sector remains underserviced in low and middle-income economies. Penetration of agricultural insurance exceeds 1 percent in developed economies but in low and middle- income countries, the agricultural insurance penetration is less than 0.3 percent. The gap between the penetration of non–life insurance and agricultural insurance increases as development status decreases. The purpose of this research work is to outline lessons from developed economies on how capacity building for agriculture insurance is done. Methodology: Relevant books references and journal articles for the study were identified using Google Scholar. The inclusion criteria entailed papers that were not over five years old. Findings: The study findings showed that insurance company’ in enveloped economies sell crop insurance policies through financial institutions or cooperatives, which are particularly important in marketing crop hail insurance. It was also found that in the developed economies, there is a national climate change policy as a means of capacity building for agriculture insurance. This policy helps the government to plan for training of staff and policymakers on how to advise farmers to take agricultural insurance. This policy also help in enhancement of the administrative and technical capacity of government institutions responsible for handling climate change related issues that affect agriculture insurance Recommendations: The study recommend policymakers in developing countries to focus on imperfections on the pricing of agricultural insurance products. This will help policymakers designing public support programs aimed at reducing the cost of insurance thus developing insurance products that are attractive and affordable to farmers and financially viable and sustainable for insurers. The study also recommend developing countries to embrace modern insurance pricing approaches that are based on the credibility theory such as the experience-based approach. This approach has been promoted in several developed countries to cover systemic risks because it allows for the adjustment of the expected loss based on additional credible information such as insured losses of other products. The study further recommend developing countries to promote insurer- insured partnerships.

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“…According to Ghosh et al (2021), in addition to investments in technology and effective production methods, agricultural insurance is an important factor that affects risk management, increasing welfare and production security. One of the biggest challenges of the agricultural insurance industry is not only providing the right insurance product, but also helping the agricultural industry to implement risk management practices to increase production (Kramer et al, 2022).…”

Section: Agricultural Insurance Market Developmentmentioning

confidence: 99%

Challenges of agricultural insurance development in Albania

MYSLIMI¹,

NIKOLLI²,

SHIMA³

2022

Economicus

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Agricultural production is exposed to natural risks that cannot be prevented and lead not only to production losses but also to a decrease in farmers’ income.As a result of these risks, farmers often do not have the opportunity to pay their loans. Against risky borrowers, credit institutions refuse to give loans. Under these conditions, the government must intervene in risk management, trying to reduce these negative effects. The provision of agricultural products as one of the most important instruments for the financial support of this sector will be the focus of this paper. Agricultural insurance provides compensation for economic losses resulting from unfavorable natural phenomena, contributing to the reduction of poverty. Without adequate insurance, lenders would not provide farmers with insurance policies. Agricultural insurance is a tool that helps farmers to predict the future, to protect the business from unforeseen events, supply and demand fluctuations or various operational challenges. In the case of developing countries such as Albania, these markets are not developed. A main problem in the development of these markets is the lack of demand due to unaffordable prices for farmers. One of the biggest challenges of the agricultural insurance industry is not only providing the right insurance product, but also helping agricultural sector in improving risk management practices to increase production. As Hazell (2009) puts it, many agricultural risks cannot be insured on a financially sound basis, but there is scope for increased insurance of farm assets, of the life and health of rural people, and of some specific perils that affect crop and livestock yields. Such insurance could be efficiently provided by the private sector if governments were to remove some of the important constraints impinging on commercial insurers. The greatest challenge is to find ways of insuring low-income rural households against natural hazards on a financially sound basis.

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Is agricultural insurance fulfilling its promise for the developing world?

Cited by 5 publications

References 0 publications

Gender-inclusive, -responsive, and -transformative agricultural insurance: A literature review

Gender-inclusive, -responsive, and -transformative agricultural insurance: A literature review

Capacity Building for Agriculture Insurance: Lessons From Developed Economies

Challenges of agricultural insurance development in Albania

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