Managing drought risk in Africa

• The vulnerability of farmers to climate related risk is reduced if they can access insurance

• Weather index insurance (WII) compensates farmers if a weather index is breached rather than for a proven loss. WII is cheap to administer and could potentially cover millions of farmers in Africa against the effects of drought.

• Insured weather metrics are only proxies for agricultural losses, meaning that there is the potential for unfair payouts and uncompensated losses if the index is inaccurate or does not reflect the land surface conditions

• The TAMSAT group has worked closely with insurers in Africa to design robust WII schemes.