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Despite their compelling logic, index insurance contracts that transfer risk from smallholder farmers and pastoralists have met with sometimes indifferent demand and low uptake by the intended beneficiaries.
Helping households manage the risks they face is important in reducing poverty in developing countries. All households face health risks, and when health shocks occur, they have a severe impact on people’s livelihoods.
Risk is pervasive in developing countries. The standard household risks of sickness, mortality, fire, theft, and unemployment are especially severe for poor families in developing countries.
Farmers face a variety of market and production risks that make their incomes volatile from year to year.