Increasing CSA evidence.We’re working to increase the availability and use of CSA evidence. Vuna have commissioned and are publishing research on key topics that impact on climate change, the agriculture sector and the East and Southern African region.
Comparative Assessment of Weather Insurance Strategies
Project Ref Number: 6924-EL08
Active period and status:
Project implementation completed – March 2016 to September 2016
The main objective of this project was to obtain an improved understanding of how and why investments in weather index insurance (WII) remain promising as a means to transfer climate risks, despite so many failures in historical programs. The assessment summarized current understanding of the commercial sustainability of these investments, their impacts, and their possible contributions to promoting agricultural investments that improve the resilience of smallholder farming systems to climate change.
While many weather index insurance (WII) initiatives have failed, donors, insurance companies and governments remain interested in these investments. New investments are being made and WII strategies are evolving. It is unclear whether this evolution in WII practice is leading to the creation of a successful commercial product. If not, what justifies these continuing investments? We attempt to consider whether a public subsidy be justified if these policies are unprofitable to the insurance industry, but still improve climate resilience.
This project supported the preparation of an Evidence and Learning Report based on i) the results of a literature review examining the design and performance of WII, and ii) a regional survey of key informants involved with current or recent WII projects. The report highlighted the major reasons why WII projects are failing, and the implications for further investment.
Results / findings to date:
A Literature Review and an Evidence and Learning Report reviewing available information about the form and payoffs to weather index insurance in smallholder cropping systems was developed and completed internally in May and December 2016 respectively. A 2-page information brief was also developed and completed internally in February 2017. This information brief is for a technical audience and is a very short quick read version of the full report. Vuna anticipates the findings will be broadly distributed and findings will be discussed in national and regional fora.