2026-06-27http://hdl.handle.net/123456789/102501• Climate change has led to increased production risks especially for smallholder farmers who often tend to be more vulnerable • Sub-Saharan Africa (SSA) has several climate change hotspots and is more vulnerable to weather shocks compared to other regions. • >363 million people affected by drought between 1980-2014 causing > US$31 billion in losses – with 19 billion in East Africa (FAO, 2015) • Agricultural insurance is a risk management tool for extreme weather events; however, its coverage remains lowest in SSA (Hess and Hazell, 2016). • Ex post – insurance payouts help coping with losses • Ex ante – risk reduction can increase investments in agriculture • However, traditional indemnity-based insurance is characterized by high transaction costs and information asymmetry problems • Index-based insurance to address these challenges is plagued by high basis riskapplication/pdfOpen Accessclimate changesmallholdersshocksagricultural insuranceinputsPresentation