Adaptation
15:00 - 16:30
| Event title | Climate Change Adaptation and Agricultural Insurance |
|---|---|
| Contents | Increasing importance has been attached to insurance in international negotiations and actions on climate change adaptation. While agriculture is the most important sector in many developing countries, it is highly exposed to climate variability and change, and therefore introduction of agricultural insurance has been high on their national agenda. Private finance and technology has also been mobilized in the development and implementation of index insurance in particular. There are many cases, however, that sales have been occurred within pilot programs and the volume of business has been limited. This event will start with presentations to share experiences on agricultural insurance in Indonesia and other developing countries. This will be followed by panel discussion with a focus on the roles of government, private sector, and development partners for sustainable implementation of agricultural insurance in developing countries. |
| Keywords | adaptation, agricultural insurance, collaboration with developing countries, concrete actions by non-state actors |
| Speakers Name and Title | Ministry of National Development Planning / National Development Planning Agency (BAPPENAS), Ministry of Agriculture, PT Jasindo, Indonesia; |
| Organiser / Co-organiser |
|
Final Programme
Program title:
Climate Change Adaptation and Agricultural Insurance
Chair:
- Dr. Izumi Kubota, Senior Researcher, National Institute for Environmental Studies, Japan
Opening remark and agenda setting (10 min):
- Dr. Masato Kawanishi, Senior Advisor, JICA, Japan
Presentations (20 min + 15 min +15 min):
Innovations and Emerging Trends in Agricultural Insurance
- Mr. Ulrich Hess, Senior Advisor, Head of Component Global Access to Insurance and InsuResilience Projects, GIZ, Germany
Opportunities and Challenges of Agricultural Insurance: Indonesian Experiences
- Mr. Sahata Lumban Tobing, Managing Director, Retail Operation, Jasindo, Indonesia
Private Sector Perspective on Agricultural Insurance
- Mr. Kiyoshi Fukuwatari, General Manager, CSR & Environment Consulting Department, Risk Management Unit, Sompo Risk Management & Health Care Inc., Japan
Panel discussion and Q&A (20 min):
Wrap-up and Closing Remark (10 min):
- Dr. Astrid Zwick, Head of InsuResilience Secretariat, Germany
Session Summary
This session was co-organized by JICA, GIZ, InsuResilience, and Jasindo (Indonesia) to understand opportunities and challenges of agricultural insuarnce. It was also aimed at understanding innoative approaches. The on-going effort to introduce agricultural insurance in Indonesia was presented and discussed.
There are growing needs in developing countries for agricultural insurance as an instrument to protect farmers from multiple perils, such as droughts, floods, pests and diseases, under the increasing impacts of climate change. A number of challeges, however, exist that need to be addressed, including moral hazard and adverse selection associated with indemnity-based insurance, and the problem of basis risk associated with index-based insurance, as well as the problems related to demand, distribution, and subsidy. Inovative approches are required to scaling-up and spreading-out of agricultural insurance, such as application of remote sensing technology, development of creative business models, and digitization in the areas of risk assessment, delivery of products, and so forth. It also requires better understanding about not only economic and financial but also social and cultural contexts of the concerned rural communities.
Climate-related loss has been globally expanding, and the risks associated with extreme weather events will further increase. A total amount of disaster aid is far below the cost of disasters, and total losses far exceed insured losses. It also needs to be recognized that insurance can boost economic growth. Global efforts are thus required further to close the protection gap.
Key Messages
- The needs for agricultural insurance are expanding in developing countries under the increasing impacts of climate change.
- However, challenges exist. Innovative approaches are required for scaling-up and spreading-out.
- Social and cultural, as well as economic and financial, contexts of the concerned communities need to be well understood to promote insurance.
- It is important to continue to take stock of and share lessons learned from experiences on the ground.
Name and organisation of the person(s) who prepared the summary
Masato Kawanishi, Japan International Cooperation Agency (JICA)
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