Making index insurance attractive to farmers

  • Anthony Patt
  • Nicole Peterson
  • Michael Carter
  • Maria Velez
  • Ulrich Hess
  • Pablo Suarez
Original Article


There are several factors that influence whether people will want to participate in index insurance programs. A number of these influence their attractiveness on economic grounds, including both the size and timing of the premium and potential payouts, and the degree of risk aversion of the potential customers. Other factors make programs attractive for reasons that are not economic, but no less valid. These have to do with the trust that people have in the insurance product and the organizations involved in selling and managing it. Indeed, data from India, Africa, and South America show that these factors may be more important than the economic ones in influencing demand. Index insurance pilot projects, in order to estimate demand for alternative products, have typically involved a great deal of interaction with potential customers. It is important to recognize that such interaction is crucial not just as a research tool, but also as a means to build understanding and trust in the products. When scaling up from isolated pilots to operational programs, it is vital to recognize this trust building function by replicating participation efforts in every community. In this paper, we examine the role of field games in establishing and building trust in three important aspects of these projects for participants: trust in the insurance product, trust in the participating organizations, and trust in their own ability to make good decisions. While games have previously been used as a way to gauge interest in the product and to identify design features, we argue that these games are also valuable tools for constructing these kinds of trust.


Index insurance Smallholder farmers Role-playing games Climate variability Climate adaptation 



This paper resulted from the workshop Technical issues in index insurance, held in October 2008 at the International Research Institute for Climate and Society at Columbia University. Funding for several of the authors’ participation in the workshop came from the World Food Programme and International Fund for Agricultural Development, with support from the Bill and Melinda Gates Foundation. We would like to thank Daniel Osgood and Molly Hellmuth for their organization of the workshop, and their comments on earlier drafts of this paper. Any remaining errors of fact or omission are those of the authors.


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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Anthony Patt
    • 1
  • Nicole Peterson
    • 2
  • Michael Carter
    • 3
  • Maria Velez
    • 4
  • Ulrich Hess
    • 5
  • Pablo Suarez
    • 6
  1. 1.International Institute for Applied Systems AnalysisLaxenburgAustria
  2. 2.Columbia UniversityNew YorkUSA
  3. 3.University of WisconsinMadisonUSA
  4. 4.Columbia UniversityNew YorkUSA
  5. 5.World Food ProgrammeRomeItaly
  6. 6.Red Cross Climate CentreThe HagueThe Netherlands

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