Engaging smallholder farmer communities to develop index-based insurance

Working closely with communities is an effective way to implement inclusive insurance projects. This is especially true for index-based insurance as project teams must ensure that complex intangible concepts, such as satellite data and triggered index values, are understandable and relevant to farmers.

Engaging communities and enabling them to contribute to designing a valuable insurance product can be an effective way to create trust, a sense of ownership and to overcome barriers that often leave rural development initiatives unsustainable after pilot stages.

This knowledge brief explores the benefits of and rationale for community engagement in index insurance initiatives, with examples from a pilot project in rural Ethiopia. Five principles are identified, starting with the importance of trust as the foundation of community engagement.