Review of pilot projects on index-based insurance in Africa: Insights and lessons learned

Abstract

Agricultural risk management involves a portfolio of strategies that can, to different extents, prevent, reduce, and/or properly transfer the impact of a shock. Adaptation, mitigation and coping strategies provide a range of complementary approaches for managing risks resulting from adverse weather events. This paper discusses how the issue of adverse weather events is a challenge for agriculture, and offers an overview of climate risk management strategies and an in-depth examination of one of the most tested risk transfer tools—index-based insurance. It describes the development of the insurance market in Africa, and analyses the major challenges and contributions made by weather index-based insurance.