There is growing concern that climate change poses a serious threat to the sustainability of the insurance business. Understanding whether climate warming is a cause for an increase in claims and losses, and how this cause-effect relationship will develop in the future, are two significant open...

Rainfall is an important source of covariate shock in developing countries. Insurance against a rainfall index has, therefore, held much promise as a formal insurance product to protect the livelihoods of poor farmers. But how good is rainfall as a measure of covariate shocks? The imperfect...

This paper presents a summary of selected policy reports and economic articles about Federal Crop Insurance Program (FCIP) under the 2018 Farm bill. FCIP is part of the farm safety net program and together with farm commodity and disaster assistance programs, they provide risk protection and...

We provide novel evidence of how an innovative market-based solution using remote-sensing technology can mitigate conflict. Droughts are a major driver of conflict in Africa, particularly between nomadic pastoralists and sedentary farmers, and climate change is predicted to intensify this...

Weather index insurance may help smallholder farmers in the developing world cope with environmental risks and shock-induced poverty traps. Despite this, adoption rates remain low. Basis risk—or the disconnect between observed outcomes and the index itself—is cited as a core contributor,...

The impacts of extreme weather events on crop production are largely heterogeneous along the timing dimension of the shocks, and the varieties being affected. We investigate the yield-temperature relationships for three categories of earliness of durum wheat: early-maturing, middle-maturing, and...

This paper explores the impact of risk preference as well as interlinked credit and insurance contract on peasants' new technology adoption. The results show that (1) risk preference has a significant impact on peasants' adoption of innovative seeds, and the influence of exact probabilistic risk...

The agriculture sector observed the penetration of parametric weather risk financial products, including weather index insurance and weather derivatives, between the late 1990s and the early 2000s. However, the adoption of such products remains low. While the reasons for low adoption are...

Risk management in agriculture is crucial and policymakers are implementing policy reforms to foster farmers' adoption of ex-ante risk management tools such as crop insurance: Their effectiveness is the core of policy evaluation exercises. The Italian subsidised crop insurance market has been...

We provide novel evidence of how an innovative market-based solution using remote-sensing technology can mitigate conflict. Droughts are a major driver of conflict in Africa, particularly between nomadic pastoralists and sedentary farmers, and climate change is predicted to intensify this...

This paper provides novel evidence on how risk exposure shapes the demand for index-based weather insurance. The focus is on Mongolia, where index insurance is offered as a commercially marketed product to pastoralists threatened by extreme weather events that cause high livestock mortality....