Scaling Up Index Insurance for Smallholder Farmers: Recent Evidence and Insights

This report explores evidence and insights from five case studies that have made significant recent progress in addressing the challenge of insuring poor smallholder farmers and pastoralists in the developing world. It updates previous assessments of index-based agricultural insurance and provides concrete evidence from a few initiatives that have demonstrated tangible development impacts among farmers previously considered difficult to insure. The report also draws out lessons from the case studies about factors that are likely to help scale-up index insurance products for smallholder farmers. The case studies cover a wide range of countries including India, Kenya, Rwanda, Tanzania, Ethiopia, Senegal, and Mongolia. Key findings include:

• Index insurance unlocks opportunities for farmers to make more money, or to show some other clear and tangible benefits such as asset protection, increased access to services like credit, or increased food security in bad years;
• Education and capacity development proved a key aspect of many case studies;
• There are substantial benefits from involving end-clients in the index design process;
• Insurance projects that have scaled have also invested in policy frameworks, supply chain integration, and market integration;
• Solid scientific research and good communication allowed many of the case studies to scale.