Microinsurance: a case study of the Indian rainfall index insurance market

Xavier Gine, Lev Menand, Robert Townsend and James Vickery ()

No 5459, Policy Research Working Paper Series from The World Bank

Abstract: Rainfall index insurance provides a payout based on measured local rainfall during key phases of the agricultural season, and in principle can help rural households diversify a key source of idiosyncratic risk. This paper describes basic features of rainfall insurance contracts offered in India since 2003, and documents stylized facts about market demand and the distribution of payouts. The authors summarize the results of previous research on this market, which provides evidence that price, liquidity constraints, and trust all present significant barriers to increased take-up. They also discuss potential future prospects for rainfall insurance and other index insurance products.

Keywords: Climate Change Economics; Insurance Law; Debt Markets; Financial Literacy; Insurance&Risk Mitigation (search for similar items in EconPapers)
Date: 2010-10-01
New Economics Papers: this item is included in nep-agr, nep-ias and nep-mfd
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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