Index of weather

Presentation by Ulrich Hess provides the basic information on the weather-based index insurance and its advantages to mitigate catastrophic weather risks in developing countries. Climate risks threaten viability and livelihoods and reduce mean income of rural households. Systemic risks are among the major obstacles to access to finance in agriculture. Traditional risk mitigation (“self-insurance”) involves over-diversification of assets and under-investment in crops. Access to formal Risk Management such as insurance can make farmers more profitable and creditworthy – but few have access. Developing countries are most vulnerable to the impact of climate change and will bear the heaviest burden of adaptation. Index Insurance offers superior risk protection. It helps to overcome moral hazard and adverse selection problems, but it suffers from basis risk. The success factor - accurate and sustainable index. Download presentation (PDF file, 455 kB)