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Singapore

Setting the scene: How insurance contributes to better livelihoods and disaster resilience for smallholder farmers. Singapore. A CORE motivation. More people have better access to quality insurance. And in agriculture … specifically ….

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Singapore

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  1. Setting the scene: How insurance contributes to better livelihoods and disaster resilience for smallholder farmers • Singapore

  2. A CORE motivation More people have better access to quality insurance

  3. And in agriculture … specifically …. RISK: Farmers understand and manage risk every day. Agriculture is risky. Small holding farming is risky. Many farmers live in high risk exposed areas. POVERTY REDUCTION: Better farm incomes means reduced poverty in countries where farming is a significant part of economic effort and has a large number of small holders involved. FOOD SECURITY: Resilience in farming is a key to national and global food supply and security. RESILIENCE: Many national and local exposures to natural disasters include high exposures in agriculture. “You can’t eat the view”

  4. How does insurance help?

  5. Especially in Agriculture • It works in practice, we’ve seen it • It is not so easy to do, however, especially to • Get the risk service delivered • Get the finance service delivered • Achieve scale • Make all of the insurance, finance, input and market options accessible, affordable and honorable • Access to finance • Increased productivity • Higher farm incomes • Greater food security, food nutrition • More resilient farmers and more resilient governments in response to natural hazards and climate challenges • Everybody wins

  6. Innovations in agricultural insurance • Product: Indemnity and index based insurances • Subsidies • Links to input, output and other risk management related initiatives • Pilots and more pilots Index based insurance initiatives originally motivated by desire to reduce cost of insurance through avoidance of moral hazard risk and need for claim assessment

  7. Index-based Insurance at the IAIS • Some key issues for the paper under development: • Formality • Definition of insurance, insurable interest • Supervising pilots • Encouraging innovation, applying proportionality in practice • Working toward the end game • Consumer protection • Financial and insurance literacy with a complex product • Dealing with basis risk • Competition policy

  8. Conclusion • Are we there yet?

  9. THANK YOU! • Craig Thorburn • Lead Financial Sector Specialist • Email: cthorburn@worldbank.org • Phone: +1-202-446-6826 • @ThorburnCraig

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