Presentation by Dan Osgood, Lead Scientist, Financial Instruments Sector Team, International Research Institute for Climate and Society (IRI), at the Scaling up agricultural adaptation through insurance conference, on the sidelines of SBSTA. https://ccafs.cgiar.org/scaling-agricultural-adaptation-through-insurance

1. Index Insurance and
Satellites: the IRI
Perspective
Daniel Osgood, Lead Scientist
Financial Instruments Sector Team
deo@iri.columbia.edu
Insurance to incentivise uptake of
agricultural technologies
Presented by:
Daniel Osgood, Lead Scientist
Financial Instruments Sector Team
deo@iri.columbia.edu
iri.columbia.edu/fi
SBSTA46, Bonn, Earth. May 2017

2. Index insurance and Agricultural Technology Uptake
Climate change: more bad years
Adaptation: increase productivity in normal
years to cover bad year loss
But strategies that increase productivity in
most years face increased risk in bad years
Threat of 1 drought year out of 5 prevents
other 4 from being much more productive
Key to uptake is to relax risk of bad year to
unlock productivity options
Different, complimentary examples
Individual, bank, meso, macro

3. Why index insurance?
Insurance: reduce risk to unlock
productivity
But problems with traditional insurance
have made it tough to implement
High costs of managing risk for chances you
already take
Recent innovation Insure weather index
eg: provide pay if there is drought
Easy to get wrong-important to get right
Most index insurance projects do not do
well
But some do succeed

4. IRI FI Sector Team and Insurance
IRI has been working for over a decade of
research, education and technical support
index insurance projects
We support most of the index insurance
projects that have gone to large scales
We support dozens of projects across
Africa, Latin America, and Asia, with several
hundreds of thousands of farms purchasing
indexes we have helped build
Some intergalactic partners:
CCAFS, USAIDe3, WFP, OXFAM, WB/IFC,
Kilimo Salama/ACRE, UN-ILO, NASA,
TAMSAT, NOAA, SWISSRe, MunichRe,
USAID, FEWSNET, Syngenta Foundation,
Pula

5. Games, exercises, formal farmer leadership

6. Software (and experts) process farmer and satellite data

7. Games to train, elicit risks and farmer opportunities

8. Games for farmer input in quantitative contract analysis/design

9. Games as Experimental economics research (dry-run)

10. Farmer’s, Uptake, Technology sandwich
Seasonal Monitoring and index design
Does the evidence agree?
Met offices, Farmers, Satellite rainfall, Soil
Moisture, Veg, Crop models, Crop cycle, yield
Materials that take everyone through each step,
built together:
Validate, improve insurance, sync actions
Link to disaster preparedness/response

11. Science Based, Farmer Driven Index insurance can do well-if useful for client
WFP/Oxfam R4 Ethiopia, Senegal, Malawi, Zambia (w/IRI)
Tens of thousands of farmers individually choosing to purchase insurance
in holistic package,
Farmers choose more per acre than American farmer
Impacts:
Increased fertilizer and seeds
Female headed households especially benefit
Increased wealth
$20 to $40 insurance payments gave
$100 to $150 more oxen and savings wealth
ACRE family Kenya, Rwanda (w/IRI)
Hundreds of thousands of farmers
Seed guarantee model-improves production
WFP Africa Risk Capacity (ARC)-National Level protection in Africa
Mongolia World Bank, Kenya Livestock IBLI/World Bank, GIIF, PG, CCRIF
India: Tens of Millions of farmers, mixed results
New, bottom up projects appearing across Latin America (w/IRI)
CRII Dominican Republic, CCAFS Honduras, Uruguay, Chile

12. Thanks!