CIRM presented at a paper at the Climate based Microinsurance: Providing Protection for Nigerian farmers held at Abhuja, Nigeria.

1. Weather based Agricultural and Catastrophe Insurance:Experiences from India Rupalee Ruchismita Arindom Baidya Center For Insurance & Risk Management, March 23, 2011

2. Centre for Insurance & Risk Management (CIRM) Established in the year 2006 as a design and research centre at Institute of Financial Management and Research (IFMR), Chennai Engage in product design & action research to facilitate greater market outreach of risk management solutions among poor households About Us

3. Growth of Weather Insurance in India The key challenges Distribution Challenges Product Irrelevance Poor acceptance of complex products High Transaction Costs Product Level Challenges Market Entry Challenges Recommendations for the Government & other implementation agencies Flow of the Presentation

4. Weather Insurance In India Timeline Source: Ulrich Hess

5. The Progress of Indian Market CRITICAL MASS? Agri-Market Linkages Distribution through State Credit programs Timeline Better products & design Government Subsides Improved AWS network Contract farming links Real Time weather data Reinsurance Champions

7. Farmers evaluate the scheme as a gamble rather than risk hedging mechanismDistribution Challenges

8. Increase product relevance for the farmer Free weather forecasts, advisory messages & regular real time weather data through SMS on Farmers’ Mobile Phones Providing Weather Insurance Bundled with Weather Forecasting SMS Service to Small & Marginal Farmers CIRM is testing the concept of bundling weather insurance with ancillary services, to explore greater acceptance Distribution Solutions Project Details: Implementation : WRMS Research: CIRM Insurer: ICICI Lombard Project Location:West Bengal & Assam Initiation: 2009

9. Increase product relevance for the farmer. Bundling with output procurement channels: PepsiCo PepsiCo introduced multi parameter weather-based insurancefor farmers who supply potatoes for the company’s potato chips business. PepsiCo procured at a marginally higher to the farmers who opted for the insurance program. Distribution Solutions Bundling with input (seed) distribution channels: Pioneer Seeds Pioneer Hi-bred, bundled a free drought cover with each seed packet, where the post sowing germination failure due to low rain was covered.

10. Poor acceptance for complex products Complex product considered opaque by the farmers & distributors. -Farmers may view the process to be vulnerable to manipulation. Distribution Challenges The Tradeoff

11. Improving acceptability Handling Product Complexity Split product according to multiple weather variables for ease of understanding. Distribution Solutions Handling Trust Issues Enroll Local Agro-input dealers, cooperatives, MFIs and NGOs as point of servicing

13. Risk cover for shorter period and identifiable loss triggersDistribution Solutions Project Details: Design : IFPRI, CIRM Insurer: HDFC Ergo Project Location: Madhya Pradesh Initiation: 2010

16. Insurance while crop loan processing Distribution Solutions

17. Lowering Transaction Costs Meso Level Catastrophe Floods Insurance in Bangladesh CIRM is testing the viability of index – based insurance schemes for catastrophic events like floods, where the MFIs are insured. Distribution Solutions Project Details: Design : CIRM, IWM Implementation : OXFAM GB Insurer: Pragati Insurance Project Location: Sirajgunj , BD Initiation: 2010

18. Obstacles in Scaling up Data (weather and crop productivity correlation) availability Insurers not able to identify potential & scope of business of a region No clear risk profile of a region Limited information about farmer preference on ‘what’of the total risk to be insured Post Launch hiccups in scaling up due to lack of ‘full service’ Point of servicing Market Entry Challenges

19. www.microinsurancemap.com Facilitative Infrastructure Choose a desired block (e.g-Papanasmin Thanjavur district of TN)

20. CIRM www.microinsurancemap.com Facilitative Infrastructure Right click on Papanasmto open block information window

21. CIRM www.microinsurancemap.com Choose type of crop & variety for which info is desired (KuruvaiPaddy) Facilitative Infrastructure Agronomy report for kuruvai paddy can be downloaded from this link

22. CIRM www.microinsurancemap.com Facilitative Infrastructure

24. Soil & Topography Map

25. Crop Data (yield, variety, acreages)Recommendations

27. Better weather to crop loss correlation

28. Invest in weather modeling.

29. Will improving pricing and at the same time will allow monitor climate change.Recommendations

30. Thank you Visit us at http://ifmr.ac.in/cirm/ Follow our blog athttp://ifmr.ac.in/cirm/blog/ For any queries email us at cirm@ifmr.ac.in arindom.baidya@ifmr.ac.in ashutosh.shekhar@ifmr.ac.in