Helping Clients Understand Insurance  Watch the screencast of this presentation >>
At our February 25, 2008 seminar, Dr. Michael Carter of the University of Wisconsin presented the work the USAID-supported BASIS Assets and Market Access (AMA) Collaborative Research Support Program is conducting with private sector actors to pilot an innovative index-based insurance product for small farmers in Peru. As part of this work, the BASIS AMA research team has developed a simple simulation game which permits poor, never-before insured farmers to learn about the complexity of index-insurance.
Following Dr. Carter's presentation, seminar participants were divided into agricultural valleys to play the insurance game.
 >>Background
>>Speaker bio
>>Resources
>>PowerPoint presentation
Background:
The USAID-supported BASIS Assets and Market Access (AMA) Collaborative Research Support Program is working with private sector actors to pilot an innovative index-based insurance product for small farmers in Peru. The complexity of the product (which insures correlated risks, but not individual-specific risks), together with the fact that most of the potential clients have never had any kind of insurance, raises concerns that farmers will misunderstand the product and the advantages it offers them. Such misunderstanding could result in depressed demand for insurance; disappointment with the incomplete insurance coverage; or, as has happened in other countries, massive cancellation of insurance policies following a good year in which no one received indemnity payouts. To circumvent these problems, the BASIS AMA research team devised a simple simulation game which permits farmers to learn about the complexity of index-insurance. The game is framed in terms of the farmers’ agricultural reality, and modest monetary incentives are used to elicit game play that should replicate farmer’s real demand for the insurance. This simulation game methodology is applicable to a wide variety of interventions that offer novel and unfamiliar products, especially those that deal with uncertain outcomes. Speaker bio: Michael Carter is professor of agricultural and applied economics at the University of Wisconsin and director of the BASIS Collaborative Research Support Program that studies rural poverty alleviation strategies in Africa, Asia and Latin American. Author of numerous articles and books, and having conducting fieldwork throughout the developing world, Carter’s research focuses on the nature of growth and transformation in low income economies, giving particular attention to how inequality in the distribution of assets shape, and are shaped by, economic growth. His current projects include analyses of the long-run impact of HIV/AIDS on poverty, social capital and the reproduction of inequality in ethnically stratified societies, and poverty dynamics and productive social safety nets. Carter’s teaching at Wisconsin includes undergraduate and graduate courses in development economics, as well as courses on the economics of globalization. Resources:
>>Concept Note: Area-Based Yield Insurance Pilot Project for Peruvian Coastal Agriculture
>>Underwriting Area-Based Yield Insurance to Crowd-In Credit Supply and Demand
>>For further resources, please visit http://www.basis.wisc.edu/ |
