Microinsurance can provide farmers with the risk management option they need to invest, also in adaptation measures. If they switch to more expensive seed but the harvest fails, they are in big trouble. Seed insurance is a promising approach, because it is very affordable and gives farmers the opportunity to keep using improved seed, even after a bad year or disaster. In addition, it is quite easy to point farmers to seeds that are adjusted to the changing weather patterns, by providing insurance only for those products, or via price differences.
Ekanath - thanks for sharing that example. Can you share some more details? What was the project's impact? Where can people find out more?
Yes, definitively. Indirect impacts so called economic disruption can sometimes be more costly than the direct impacts. So far, microinsurance have mostly addressed direct impacts. The livelihood disruption in relation to climate change is still an under-studied topic.
Yes, potential is huge. We need to keep working it and keep having conversations like this one. Now I have to run. Until the next time. And Florent I am looking forward to hearing much more about your models. Take care.
As mentioned, the first step from our perspective would be to understand the existing experiences better and learn from them. Do people actually sense the incentive and respond to it? Is the adaptation measure it incentivizes implemented effectively, and does it have the desired effect? If people are not responding to the mechanism, why not? Where are the gaps.
But there is also space for more experimentation. We'd like to call on microinsurance schemes to review their policies and see how they can build incentives for disaster reduction in. As sobiah mentioned, this can often be achieved by collaborating with other existing initiatives, such as NGOs activities around capacity building. Like in the example of health insurance and the yoga class, an insurance could be cheaper if the taker participates in a relevant training.
Thank you Ekanath! Does this programme still exist?
The potential is high, sure. But how can we make this product more attractive to local low-income communities? I think we still need a lot of sensitization and education on this topic. Have you already made some good experience working with cooperatives and communities?
Thanks Zahid, please give me some time i will share some of the documents with you , This initiatives was piloted very long time ago . This was more of informal community based insurance system managed by the community group association locally
Ag microinsurance is an important tool in the toolkit of approaches to manage the threats small farmers face - early warning systems that inform farmers of approaching weather events whether they are community based radio or mobile phone based. Access to information/ data is key, and creating national and/or regional databanks would be useful. I am also of the opinion that subsidies don't work but the right incentives do! Also, a lot of regulatory frameworks do not make provisions for weather index insurance, so another next step is to work on creating an enabling environment
The key is to conduct a very thorough needs analysis to design products that meet the needs of low-income communities, and pricing them so that they are within their reach. As I mentioned earlier, we are using street based theatre, radio, tv spots in the local dialects to create awareness as well as with credit unions, cooperatives and associations
+1
Sharing tools among implementing organizations might also be useful. For example, the early warning system with SMS before the weather event is really something that might be relevant for lots of weather insurance products. Yet, implementation is not trivial I'm sure, and the devil is in the detail. So sharing good practice could also accelerate the application of this approach.
Great discussion!
That brings us to the end of the live portion of this discussion. We'll leave the discussion open, so please do continue to post your comments.
If you'd like to know more about this topic, be sure to read the report by Endeva and ClimateAnalytics, available to download here.
Thanks to our panellists and all of you who joined us for this conversation!
People Mutuals works with farmer federations. Among other benefits, this embeddedness makes it much easier to explain the insurance approach and gain trust. It build on an established relationship among and with farmers. It also makes it easier to communicate the DRR component. Farmers are used to getting practical advice on agricultural practices, so adaptation advice is part of an ongoing process.
Thanks Zahid for creating this space!
Please share your experiences if you are working on the topic, or contact Florent, Sobiah or me individually. Would be great to find more collaborators!
Agreed! The local insurers that we work with in the region found that the microinsurance solutions in addition to being innovative, allowed them to access the clients at the Bottom of the Pyramid instead of trying to make repeat sales to a saturated market (keeping in mind that the Caribbean islands have small populations). The microinsurance solutions are viable, affordable and demand driven eliminating the need for government subsidies
Good Day all. There has been discussions on climate change and the impact on the agricultural sector for some time now. However very little has been done to encourage adaptation. With the livelihood protection policy which was launched in Saint Lucia we have seen persons in the sector beginning o recognize that microinsurance is a viable option. Prior to the devastating Christmas eve Trough there was slow policy take up. However since then we have seen both the distribution channels and direct customers purchasing the product. Additionally the Ministry of Agriculture in their training of Farmers have specifically pointed to the product as a risk transfer mechanism.
Thanks Christina , the project was phased- out in 2003 , I will have to check how the community are operating now. If I find anything interesting I will certainly share with you soon.