SDG 2: Zero Hunger
Most farming is done by small scale farmers. It is not only social and employment matter, it's also quite relevant for food security. That we have something to eat, depends more or less on the faiths of these small scale farmers...
(Peter Wrede, World Bank, at the A2ii-IAIS-MiN-AIO Consultative Forum: Scaling up agricultural index insurance in Africa: building disaster resilience of smallholder farmers)
Insurance can support risk management in the food production value chain. It is a key component to achieving food security and government resilience in response to natural hazards and climate change.
Index insurance, for instance, helps smallholder farmers gain access to finance, increase productivity and income thereby reducing poverty and vulnerability.
Insurance supervisors can assist in the development of agricultural insurance
To advance the agricultural insurance market development, insurance supervisors have several mechanisms at hand.
Openness to innovation stimulates the development of the inclusive insurance market as well as gender-inclusive policies. Here, aiming towards proportionality and risk-based supervision, removing regulatory barriers that hinder innovation is of particular importance.
Innovation in inclusive insurance comes with responsibility. Supervisors must make sure to understand the risks and the impact products can have on policyholders/consumers. Many smallholder farmers may not have been exposed to insurance and would therefore need additional support and protection. Meaningful disclosure, investing in building consumer trust are important for encouraging take-up.
Supervisors' convening power can help in building partnerships with government ministries and other stakeholders to enable wider access to agricultural insurance products. Here, data driven policymaking is key.
A2ii work on SDG 2
The A2ii-IAIS Dialogue presented key insights from the joint A2ii-UNCDF paper on “Index insurance best practices for insurance regulators and practitioners in the Pacific Island countries”. A recording is available.
These best practice regulatory guidelines are a step in the right direction to better regulating and encouraging index insurance-based solutions to build the capacities of insurance supervisors and regulators to create enabling market conditions for successful inclusive insurance interventions.
Based on the findings of the survey conducted by A2ii during the second half of 2020, this paper presents an update of the stocktaking exercise in 2018 (A2ii Paper: Index Insurance: status and regulatory challenges) . It provides an overview of how the interviewed supervisors have handled the challenges related to index-based insurance. The paper also presents some of the challenges faced by the industry, as well as insights from its representatives on potential facilitators to encourage more participants to enter the market. Continue reading...
This Policy Note makes the case for agricultural insurance in the context of food security, explains the role of regulation to make effective risk protection work and highlights some of the challenges in regulating innovative index-based insurance approaches.
Since index-based insurances are increasingly looked to as a means to manage weather and catastrophic events, support food security and enhance access to insurance, the Issues Paper provides background on this product, describes practices and actual examples, identifies related regulatory and supervisory issues and challenges.
♦ 9th, 10th and 11th Consultative Forums in Africa, Asia and Latin America: Scaling up insurance as a disaster resilience strategy for smallholder farmers.
Browse our Consultative Forums playlist for the recordings from the events.
Consultative Forums were designed as a platform for exchange between industry and insurance supervisors, jointly organised by the A2ii, IAIS, MiN and the local partners. We explored the challenges and opportunities of agricultural index insurance and how various stakeholders can work together to achieve sustainability and scale while looking at client value for index-based insurance products.
This paper seeks to provide a review of supervisory approaches to index insurance and to set out some of the regulatory and supervisory challenges faced by insurance supervisors. It is drawing on the results of an online survey carried out in the first half of 2017 together with telephone follow-up. Continue reading...
On this consultation call, experts presented the content of the IAIS “Issues Paper on Index-based Insurances”, and the A2ii’s “Index Insurance: Status and Regulatory Challenges” from 2018. In addition to these presentations, supervisors shared their jurisdiction’s experience with index-based insurance.