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Microinsurance: A Case Study of the Indian Rainfall Index Insurance Market

49 Pages Posted: 20 Apr 2016  

Xavier Giné

World Bank - Development Research Group (DECRG)

Lev Menand

affiliation not provided to SSRN

Robert M. Townsend

Massachusetts Institute of Technology (MIT)

James I. Vickery

Federal Reserve Bank of New York

Date Written: October 1, 2010

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

Suggested Citation

Giné, Xavier and Menand, Lev and Townsend, Robert M. and Vickery, James I., Microinsurance: A Case Study of the Indian Rainfall Index Insurance Market (October 1, 2010). World Bank Policy Research Working Paper No. 5459. Available at SSRN: https://ssrn.com/abstract=1697966

Xavier Gine (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: https://sites.google.com/site/decrgxaviergine/

Lev Menand

affiliation not provided to SSRN

Robert Townsend

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

James Vickery

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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