Swiss Re Insurance-Linked Fund Management

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India weather insurance scheme meeting resistance

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There’s a report here on the lack of uptake of the new weather insurance scheme in India. It seems that it’s proving a tough job to move farmers over from the existing scheme to the new one due to the more generic claims trigger in the old version.

I believe this is a similar case to the Caribbean Catastrophe Fund which has had to amend it’s scheme because it didn’t cater for less extreme events which still caused the insured sizable losses. Payouts on this new weather risk scheme in India are based on rain, temperature or frost moving outside the parameters set. This means that there will be cases where a farmer could incur significant losses but not receive a payout as the parameters may not be exceeded.

Some rework is required here to provide cover for these scenarios. It will also be important to provide education programs to give farmers the confidence that they will be covered for all significant loss scenarios (up to and above the older scheme).

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