Defining Drought for Insurance


Researching fundamental questions to improve index insurance

SatWIN-ALERT was developed with the recognition of climate and drought effects on vulnerable populations, and the uncertainties associated with weather and climate forecasting. Hundreds of millions of farmers dependant on agriculture suffer debilitating losses each year, drastically impacting socio-economic growth and development. Access to risk management tools such as insurance would greatly improve agricultural productivity, while also reducing the risk of significant loss to one’s livelihood.

Index insurance is designed to pay out benefits on a basis of a predetermined index, providing a vital safety net for farmers in the case of a catastrophic event. Compensation through weather or area yield metrics, rather than on measured losses, is an affordable alternative to traditional insurance. However, defining this drought index is a significant challenge for agricultural insurance sectors. This is where we come in.

This project aims to address the needs of the agricultural support and insurance sectors by identifying and answering key research questions around participatory index design, and working with industry partners in compiling and documenting the agro-meteorological and index design research needs of the insurance community. Through utilizing satellite information, monitoring environmental conditions, and conducting core socio-economic participatory research, SatWIN-ALERT provides the research and data necessary for defining drought indices and strengthening resilience for farmers.

Our Project Approach

Documenting Needs

Connecting with partners to understand the needs of index-insurance agencies and construct profiles

Developing Tools

Utilizing technology to develop agrometeorological tools for answering core basis risk research questions

Economics Research

Engaging with participants in Malawi and Senegal to answer socio-economic insurance design questions