Index-Based Risk Financing and Development of Natural Disaster Insurance Programs in Developing Asian Countries

  • Sommarat Chantarat
  • Krirk Pannangpetch
  • Nattapong Puttanapong
  • Preesan Rakwatin
  • Thanasin Tanompongphandh
Part of the Risk, Governance and Society book series (RISKGOSO, volume 18)


This chapter explores innovations in index-based risk transfer products (IBRTPs) as a means to address important insurance market imperfections that have precluded the emergence and sustainability of formal insurance markets in developing countries. Using a combination of disaggregated nationwide weather, remote sensing and household livelihood data commonly available in developing countries, the chapter provides empirical illustration of nationwide and scalable IBRTP contracts to analyse hedging effectiveness and welfare impacts at the micro level, and to explore cost effective risk-financing options. Our analysis uses Thai rice production to extend the methodology and implications to enhance development of national and regional disaster risk management in Asia.


Normalise Difference Vegetation Index Crop Cycle Normalise Difference Vegetation Index Data Move Excessive Index Insurance 
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Copyright information

© Economic Research Institute for ASEAN and East Asia (ERIA) 2015

Authors and Affiliations

  • Sommarat Chantarat
    • 1
  • Krirk Pannangpetch
    • 2
  • Nattapong Puttanapong
    • 3
  • Preesan Rakwatin
    • 4
  • Thanasin Tanompongphandh
    • 5
  1. 1.Crawford School of Public PolicyThe Australian National UniversityCanberraAustralia
  2. 2.Faculty of AgricultureKhon Kaen UniversityKhon KaenThailand
  3. 3.Faculty of EconomicsThammasat UniversityBangkokThailand
  4. 4.Geo-Informatics and Space Technology Development AgencyMinistry of Science and TechnologyBangkokThailand
  5. 5.Faculty of EconomicsKasetsart UniversityBangkokThailand

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