This presentation overviews the work by the World Bank’s Agricultural Risk Management team in index-based weather insurance as an alternative to traditional crop insurance for smallholder economies. The main constraints for traditional products include poor rural insurance infrastructure and capacity; operational difficulties for small farmer agriculture; moral hazard; adverse selection due to asymmetric information; high monitoring and administrative costs; and that agricultural production risk needs reinsurance as covariant risks (e.g. drought) are an inherent characteristic. Risk management products are critical for reducing cost and increasing access to agricultural credit, however, there was a challenge to create an alternative, efficient and cost effective crop insurance program that can be easily reinsured and distributed to both individual smallholder farmers and larger actors in the agricultural sector. For these reasons, index-based weather insurance can be viewed as a better alternative to traditional crop insurance for smallholder farmers.