Savoirs

Index insurance has a role to play in agricultural development and risk management, yet it faces operational and technical challenges to reach scale and sustainability. Data are a key challenge and were the focus of the project “Improving Agricultural Risk Management in Sub-Saharan Africa: Remote Sensing for Index Insurance”. Limited availability, accessibility, quantity and poor quality of data on the ground are some of the primary technical constraints preventing scale-up and sustainability of index insurance. Without sufficient quality data, either it is impossible to design products for some areas and countries, or products that are designed can become unreliable, not compensating when they should. These inconsistencies intensify vulnerability, lead to distrust of insurance, and ultimately have an impact on demand. This publication details the project, which investigated overcoming issues with ground data by using remote sensing data for index insurance. It describes the different remote sensing options and opportunities available for index insurance, but it also recommends further investment in research and development, supplementary ground data and capacity-building going forward. 

The International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) have joined forces to reduce the vulnerability of poor rural people to extreme weather events that can be devastating to agricultural productivity. With support from the Bill and Melinda Gates Foundation, IFAD and WFP are working to improve the access of poor rural people in developing countries to index-based weather insurance. This type of insurance can help them cope better when extreme weather hits, and can open the door to other financial services, in particular credit.

This document is intended to aid delivery channels, microfinance providers in particular, in working with insurance companies to develop successful microinsurance products for the low-income market. 

A systematic new-product development process is crucial to the success of microinsurance products for many reasons, including: Saving money – by maximizing the potential for product success; Saving management and staff time – by ensuring, within reason, that the product has market demand, and by working out staff and systems issues early in the process, when it is easier and cheaper to make changes; Generating goodwill in one’s market – by offering products that will not have to be withdrawn or substantially altered once they are offered throughout the market. The process outlined in this manual will help microinsurance developers create successful microinsurance products. ‘Success’ means meeting the needs of the three major parties in the microinsurance relationship: low-income policyholders, the insurer and delivery channels.

This manual is intended as an aid to microinsurance institutions. It presents a technique called ‘process mapping’ that can support institutions in self-analysis by assisting them in understanding, developing and improving business processes. Although the concepts presented may be used for many types of projects and processes, this manual was specifically developed as a supplement to Microinsurance product development for microfinance providers (McCord 2012).

The manual describes how a process map can be drawn, analysed and adapted for the microinsurance sector. It offers practical guidance about which processes to concentrate on, and guides the reader through the task of improving these processes, first on paper and then in practice. For more information please click on the link below.