Microinsurance & DRR: Challenges and Opportunities in the Context of Climate Change
This paper examines the role of microinsurance in disaster risk reduction (DRR). It focuses on crop/weather insurance, and identifies possible strategies for Christian Aids involvement in this sector.
The paper gives an overview of the crop insurance sector. It examines advantages and disadvantages of traditional and index-based crop insurance models. It explains microinsurance delivery models and different approaches to index-based microinsurance. The paper analyzes results of a survey of Christian Aid (CA) members regarding the relevance of crop insurance in DRR and the potential role of CA in provision of crop microinsurance.
The paper states that microinsurance may be a sustainable approach to weather risk reduction and climate change adaptation in developing countries. It outlines 2 viable options for CAs involvement in crop insurance:
- CA can advocate provision of microinsurance schemes to low income individuals by governments and commercial providers;
- CA can partner with other NGOs and insurance companies to launch a pilot crop and weather microinsurance project.
The paper concludes that more pilot projects and further research studies are necessary before CA would consider any direct or indirect involvement in microinsurance.
