Index Insurance Innovation Initiative (I4)

The I4 Index Insurance Innovation Initiative is a response to the evidence that uninsured risk can create and sustain poverty and food insecurity, especially amongst low-wealth agricultural and pastoralist households. While index insurance would seem to be an ideal instrument for transferring risk from smallholder households (as it promises low transaction costs and minimal problems of adverse selection and moral hazard), its viability and poverty reduction impacts have yet to be demonstrated.

The goal of the I4 is to discover whether, when and how these impacts can be realized and sustained. Drawing on generous funding from the United States Agency for International Development (USAID), the I4 will achieve this goal by rolling out up to 10 pilot projects across Africa, Asia and Latin America, strategically choosing a diversity of agro-ecological, economic and social environments. Each program will directly impact 5000 small-scale agricultural or pastoralist households and will be designed to assure local scale up and dissemination and global learning.

The AMA Innovation Lab (hosted by the University of California, Davis), USAID, the Food and Agriculture Organization of the United Nations (FAO), the Micro-Insurance Innovation Facility of the International Labour Organization (ILO), and Oxfam America are the primary organizations behind the creation of the I4 initiative.