Insurance Against Covariate Shocks : The Role of Index-Based Insurance in Social Protection in Low-Income Countries of Africa
Index insurance, such as weather
indexing, addresses other inherent problems in insurance by
using an indicator that is not affected by individual
behavior and may address monitoring costs and moral hazard.
A number of innovations using index insurance are being
tried currently in diverse settings ranging from India to
Mongolia to Malawi. Marketing costs may limit the provision
of such insurance to small farmers, but even in such cases