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| Banerjee, Chirantan; Berg, Ernst. |
| International development organisations, through partnerships with local insurance companies, have been promoting weather index based insurance (WIBI) in developing countries. Due to lower operational costs, they expect shorter pay-off period, often overlooking high initial design costs. Experiences however show high post-pilot mortality of these programmes. Literatures report lack of insurance participation. We propose lack of push from insurance providers as an additional factor. To verify, cash flows of a Nicaraguan groundnut based WIBI and a comparable but hypothetical named peril insurance are simulated against 80 scenarios. Additionally, a test of stochastic dominance of their estimated Net Present Values show that WIBI take comparatively longer to... |
| Tipo: Presentation |
Palavras-chave: Index based rainfall insurance; Weather derivative; Operational cost; Nicaragua; International Development; Risk and Uncertainty. |
| Ano: 2012 |
URL: http://purl.umn.edu/122448 |
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| Banerjee, Chirantan; Berg, Ernst. |
| Index-based weather insurances are innovative tools for mitigating weather risks in agriculture. Several donor agencies and development organisations are investing substantially to propagate these programmes in developing countries. However, often due to high basis risks, these products mitigate risk only through diversification effect, thereby defeating the intended purpose. Besides, they send confusing messages to the farmers regarding the very concept of insurance. Therefore, this paper investigates the efficiency of two such index-based weather insurances in Philippines, designed to mitigate rice yield loss caused by strong typhoon winds. The insurance products are designed assuming negative linear correlation between wind speed and rice yield. To... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Basis risk; Typhoon; Index-based Insurance; Crop Production/Industries; Risk and Uncertainty. |
| Ano: 2011 |
URL: http://purl.umn.edu/114240 |
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