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Introduction to index insurance

Duration: 2 days

Overview:

Index-based insurance will create opportunities for farmers to access finance and protect their livelihoods after sub-optimal growing seasons. This type of insurance operates in a system that includes government and the private sector, local insurance companies and international reinsurers, banks and agricultural value chains. Understanding the interrelations between the system elements is essential to ensure development, farmer acceptance, and sustainable growth over time.

Training Objectives:

  • Understand the concept of index-based insurance and its role as an agricultural risk management tool, as well as its limitations
  • Know the requirements to develop and sell index-based agricultural insurance products
  • Understand the requirements for data, and the connection between data, the insurance product, and the insurance premium
  • Discuss successful distribution models for index-based insurance products
  • Understand pricing, the need for reinsurance and how reinsurers can help designing better products
  • Understand the typical roles of government, the private sector, and the farming communities and the importance of partnerships (such as partnerships on distribution which is an important determinant of success)

Who could benefit from the training:

The main target audience for this introductory training are insurance practitioners who would like to offer agriculture insurance; those who have existing agriculture insurance program but would like to learn about index or parametric insurance; and distribution channels who are involved in agriculture insurance. The secondary audience includes reinsurers, value chain actors, regulators, and other stakeholders who play a key role in index insurance programs.
 

Methodology:

This course takes on a combination of theory-based lectures, group discussions and individual activities. Time will also be dedicated to individual exercises and calculation practice.