Offering Rainfall Insurance to Informal Insurance Groups: Evidence from a Field Experiment in Ethiopia

The authors report the results from a first attempt to market weather insurance products to informal risk-sharing groups. In collaboration with an insurance company in Ethiopia, they marketed index-based rainfall insurance products to members of pre-existing risk-sharing groups. Leaders and members of risk sharing groups were trained on risk management and the possible benefits of insurance. Among those trained the authors randomized training, with some sessions focusing on group benefits and others only on individual benefits from insurance. The authors found that members of groups whose leaders had received group-focused training had considerably higher uptake. Their results suggest benefits from marketing index-based insurance to insurance groups, at least in terms of uptake.