The Potential for Scale and Sustainability in Weather Index Insurance for Agriculture and Rural Livelihoods

Insurance has become an important tool for development practitioners. Not only can it help people reduce their risk in the face of recurrent floods and droughts, it has the potential to unlock other opportunities, such as access to credit, which can help people invest in a better future. Over the last decade, many pilot projects have proven that insurance can be implemented in poor rural and urban communities and can cover risks ranging from crop losses to poor health. However, the question of whether insurance can be applied sustainably and at a large scale to help to reduce the risk of hunger faced by almost 1 billion people worldwide has remained unanswered. The World Food Programme (WFP) and the International Fund for Agricultural Development (IFAD) set out to answer this question learning from projects implemented by other organizations and from the Weather Risk Management Facility (WRMF), a joint WFP and IFAD initiative funded by the Gates Foundation.