Policy for implementation of Index Based Weather Insurance revisited: the case of Nicaragua
| dc.creator | Banerjee, Chirantan | |
| dc.creator | Berg, Ernst | |
| dc.date | 2017-04-01T17:56:08Z | |
| dc.date.accessioned | 2026-07-09T06:00:43Z | |
| dc.description | 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 pay-off yielding lower returns with considerable risk. WIBI, given its advantages is undoubtedly an efficient agricultural risk management tool. Therefore, to make it sustainable, long-term pilots and technical assistance is required until the product pays-off and yield profits for insurance providers. | |
| dc.identifier | doi:10.22004/ag.econ.122448 | |
| dc.identifier | https://ageconsearch.umn.edu/record/122448/files/Banerjee.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/122448 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/571205 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/122448 | |
| dc.title | Policy for implementation of Index Based Weather Insurance revisited: the case of Nicaragua | |
| dc.type | Text |