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Index Insurance for Weather Risk in Lower-Income Countries

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Publication date
14/11/2006
Number of Pages
51
Language:
English
Type of Publication:
Working Papers & Briefs
Focus Region:
Global
Focus Topic:
Climate / Weather / Environment
Type of Risk:
Weather & Climate related
Type of Risk Managment Option:
Risk coping
Commodity:
Other
Author
Jerry Skees, Anne Goes, Celeste Sullivan, Richard Carpenter, Mario Miranda, Barry Barnett
Organization
GlobalAgRisk, Inc., USAID, DAI Washington

This primer focuses on innovation in weather insurance designed to fit the special circumstances of lower-income countries where rural and agricultural financial markets are largely underdeveloped. Weather insurance is important to the long-term economic development of lower-income countries as a means of spurring rural finance and agricultural and rural development. Weather insurance can also help alleviate chronic poverty. The lack of access to weather insurance can cause rural and farm households in lower-income countries to consume their assets to survive an extreme weather event, or their assets may be destroyed, throwing these households into a cycle of poverty with no means of recovery. To be clear, the lack of weather insurance may be only one of several constraints that are slowing progress in economic development and rural financial markets in lower-income countries.