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Global Index Insurance Facility

NEWSLETTER
September 2016
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Innovative Index Insurance Solutions in Uruguay

      Photo: World Bank Group

Implementing of a Pilot Insurance Program for Livestock

In 2011 The World Bank Group launched a feasibility study on developing an Index Insurance pilot in Uruguay, funded by the Government of Japan through the Global Index Insurance Facility. The study quantified the total number of reproductive livestock units as 3.8 million countrywide, with US$ 315 million of total sum insured. The corresponding number of livestock producers was estimated at 38,000.

The output of this technical and financial assistance has allowed the Government of Uruguay to start pilot testing an innovative Normalized Difference Vegetation Index (NDVI) index insurance to cover small scale cattle producers and meat producers in two regions against damage caused to permanent pasture by drought. The pilot phase is scheduled between 2015 and 2017, and the beneficiaries include small and medium meat producers who are part of a climate change resilience and adaptation project.

Click here for more details

In the News: Index Insurance Around the World

Global Index Insurance Facility Newsletter

India: Weather insurance has become increasingly popular among Indian farmers as droughts and unseasonal rainfalls are destroying their crops.

Indonesia: Through the partnership with AXA Corporate Solutions on parametric weather insurance, the World Bank helps in the fight against severe weather and climate change, and its impact on developing regions.

The Philippines: There has been an attempt to push for an act that would mandate the Philippine Crop Insurance Corp. (PCIC) to offer index-based insurance coverage. Congressman Arthur Yap, Economic Affairs Committee Chairman, said that "with stronger and modern insurance system in the agriculture sector, banks would be more confident to lend to farmers."

Rwanda: At the African Rural and Agricultural Credit Association-AFRACA conference on best practices in rural agriculture finance, experts discussed “fast-tracking replicability of functional models in rural and agricultural Finance including weather index insurance.

TanzaniaPlans are underway to draw up an insurance strategy on agriculture in the country. It is hoped that by having a strategy, agriculture will be stimulated.

Zambia: The Government of Zambia has called on insurance firms to develop affordable weather index insurance products in the wake of climate change as they are part of the risk management mechanisms for crop protection among small-scale farmers.
 

In Focus: Pre-crisis Financial Risk Management

Young girl in an evacuation center, 2009. Philippines. Photo: Jerome Ascano / World Bank


Investing in Pre-crisis Financial Risk Management Eases Post-Disaster Recovery Needs

In a blog post published on the World Bank Group's Voices and on The Huffington Post, Gloria Grandolini, Senior Director of Finance & Markets Global Practice at the World Bank Group, wrote that market-based instruments – such as insurance ― can act as shock absorbers in case of natural disaster, helping countries around the world avoid the worst of a crisis’ financial impact. Ms. Grandolini also lists five reasons why investing in pre-crisis financial risk management can ease post-disaster recovery needs. 

As part of the World Bank Group’s Finance & Markets Global Practice, the Global Index Insurance Facility (GIIF) works to expand the use of index insurance as a risk management tool in agriculture, food security and disaster risk reduction. "Insurance delivers capital to the places where it’s most needed, at the moment when it will be most effective. By putting a price on it, insurance also incentivizes communities to better manage and reduce risk," Ms. Grandolini explained in the blog. 

To read the blog, click below.

 
Read More
Gloria Grandolini on disaster risk modelling
Gloria Grandolini, Senior Director, Finance & Markets Global Practice, World Bank Group attended the 43rd General Assembly in Rome. In this interview, Gloria discusses the opportunities and challenges around disaster risk modelling as well as public-private partnership opportunities for insurance. Click here to watch the interview. 

Publication Highlights

How to Measure Whether Index Insurance Provides Reliable Protection

 
Karlijin Morsink, Daniel Jonathan Clarke and Shardreck Mapfumo co-authored "How to measure whether index insurance provides reliable protection," a Working Policy Research Paper available on EconPapers . Part of the Policy Research Working Paper Series from The World Bank, the paper is a product of the Disaster Risk Financing and Insurance Program (DRFIP), a partnership of the World Bank’s Finance and Markets Global Practice Group and the Global Facility for Disaster Reduction and Recovery. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org

To read the study, click here.
 

Global Index Insurance Facility: Achievements Report (Phase 1: 2010-2015)

 
Global Index Insurance Facility has produced a report that highlights the Program’s achievements and the progress of the project implementation during phase one: 2010-2015. These achievements and lessons learned are the result of joint efforts, hard work and commitment with GIIF's implementing partners on the ground as well as generous support from the donors. Prepared collaboratively by the GIIF team across the globe, this report also offers a snapshot of past and future activities, including GIIF’s roles in capacity-building, outreach and communications efforts.

To read the document, click here.
 

Swiss Re: Strategic Reinsurance and Insurance: the Increasing Trend of Customized Solutions

 
Reinsurance and insurance markets are changing rapidly. Insurers around the world have become increasingly sophisticated in managing their capital and risks. Consolidation, evolving solvency regulation and the spread of enterprise risk management are driving a trend of centralized re/insurance buying by insurance companies and large corporations, tailored to enable growth and steer group-wide risk appetite across all types of risks.

To read the document, click here.
 

The Landscape of Microinsurance in Africa 2015

 
Munich Re released a study that reports on the latest activities and current state of microinsurance in Africa as part of the Microinsurance Network’s World Map of Microinsurance Programme. Aiming at providing a comprehensive understanding of the environment in which both microinsurance and traditional insurers operate in Africa, the publication contains data collected from over 200 microinsurance providers representing all 36 of 54 African countries where microinsurance is available. 

To read the document, click here.
 
GIIF Activity Snapshot

"I was reimbursed. It was a very good feeling,"
said farmer Jacintha, a single mother and a smallholder farmer who cultivates her 3-acre plot. 

 

"Operationalizing Index Insurance in Kenya"

In june 2016, over 60 participants gathered at the College of insurance in Nairobi to discuss best practices and share their knowledge and expertise on index insurance, particularly livestock insurance and agriculture insurance. The discussions were quite timely, as the Government of Kenya recently allocated US$6 million for crop and livestock insurance for smallholder producers for next year, as one of the ‘key government flagship projects to drive the transformative agenda’.  This is a five-fold increase in budget from the previous years with strong allocations toward data systems and premium subsidies.
 
The training offered an opportunity to bring the government and private sector players together to discuss future plans and to learn from each other. This knowledge-sharing event, “Operationalizing Index Insurance in Kenya” was attended by representatives from over a dozen insurance companies in Kenya, Zambia, and South Africa as well as government entities including the Insurance Regulatory Authority, the State Department of Agriculture, and the State Department of Livestock. “The training has given participants the valuable opportunity to learn more about NDVI (Normalized Difference Vegetation Index), area yield products, and other innovations in the field of Index Insurance,” said Mr. Vincent Githinji from the State Department of Livestock. 

Requests for similar training programs have been made by the governments of Rwanda, Cameroon, and South Africa. 

See alsoSmarter Farming Could Cut Hunger in Drought-hit Southern Africa: Researchers (Reuters)



 

Upcoming Events

 
  • Agriculture Insurance Training in South Africa
    Date: 13-28 October 2016

    Location:  Johannesburg, South Africa
    Description: Agriculture Insurance Training in South Africa
    Global Index Insurance Facility will deliver two training sessions on agriculture insurance to participants from South Africa and neighboring countries. The training will cover a wide variety of topics, ranging from operationalizing agricultural insurance to risk transfer process. The target audiences for these trainings are senior official and technical staff from insurance and reinsurance companies, brokers, and regulators. 
Vanessa Meadu at University of Copenhagen's CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) has created a colorful, comprehensive infographic that explains how index insurance could help millions of smallholder farmers fight back against climate change. For more information about the CGIAR and CCAFS, please visit their Linkedin Group at https://www.linkedin.com/company/cgiar-climate. 

More great presentations like this one can also be found at http://www.slideshare.net/cgiarclimate/ccafs-index-insurance-infographic-final.
Spotlight: GIIF Global Footprint
 
As of today, GIIF has worked in 31 countries around the world, with potential projects in at least seven new countries. On the private sector side, GIIF offers advisory services to local and regional insurance companies, and/or intermediary broker/agents in the development and retailing of index insurance products. On the public sector side, GIIF works closely with governments at the regional and national-level on policy issues to create an enabling legal and regulatory environment for index insurance. GIIF team also carries out feasibility studies and index insurance pilots to test index insurance markets.



Our Donors



GIIF is funded by the European Union, Japan, and the Netherlands.

The EU is the primary donor partner to the GIIF Trust Fund with a focus on the African, Caribbean and Pacific Group of States (ACP). The governments of Japan and the Netherlands are providing additional support to different regions and countries where World Bank Group operates.
The Global Index Insurance Facility (GIIF) is a multi-donor trust fund supporting the development and growth of local markets for weather and disaster index-based insurance in developing countries, primarily Sub-Saharan Africa, Latin America and the Caribbean, and Asia Pacific.
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