Does index insurance really work for smallholder farmers?
Published on July 9, 2025 – Updated on July 9, 2025
New article in Let's Talk Development, a section of the World Bank Blogs
by Pauline Castaing (World Bank Group) and Jules Gazeaud (CERDI, CNRS)
Traditional insurance for smallholder farmers in low- and middle-income countries (LMICs) is prohibitively expensive. Serving rural and remote areas requires costly on-site visits to assess risks and verify losses. In addition, the information available to insurers about farmers' practices, and what they are exposed to, is limited, which drives the insurance cost up due to the higher premiums charged to cover the uncertainty.
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Traditional insurance for smallholder farmers in low- and middle-income countries (LMICs) is prohibitively expensive. Serving rural and remote areas requires costly on-site visits to assess risks and verify losses. In addition, the information available to insurers about farmers' practices, and what they are exposed to, is limited, which drives the insurance cost up due to the higher premiums charged to cover the uncertainty.
Read more
Read the research article
Castaing, Pauline, and Jules Gazeaud. “Do Index Insurance Programs Live up to Their Promises? Aggregating Evidence from Multiple Experiments.” Journal of Development Economics 175 (June 2025): 103501. https://doi.org/10.1016/j.jdeveco.2025.103501.