Index-based insurance
Index-based insurance, also known as index-linked insurance or, simply, index insurance, is primarily used in agriculture. Because of the high cost of assessing losses, traditional insurance based on paying indemnities for actual losses incurred is usually not viable, particularly for smallholders in developing countries. With index-based insurance, payouts are related to an “index” that is closely correlated to agricultural production losses, such as one based on rainfall, yield or vegetation levels (e.g. pasture for livestock). Payouts are made when the index exceeds a certain threshold, often referred to as a “trigger”. Index-based insurance is not therefore designed to protect farmers against every peril, but only where there is a widespread risk that significantly influences a farmer’
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Index-based insurance
Index-based insurance, also known as index-linked insurance or, simply, index insurance, is primarily used in agriculture. Because of the high cost of assessing losses, traditional insurance based on paying indemnities for actual losses incurred is usually not viable, particularly for smallholders in developing countries. With index-based insurance, payouts are related to an “index” that is closely correlated to agricultural production losses, such as one based on rainfall, yield or vegetation levels (e.g. pasture for livestock). Payouts are made when the index exceeds a certain threshold, often referred to as a “trigger”. Index-based insurance is not therefore designed to protect farmers against every peril, but only where there is a widespread risk that significantly influences a farmer’
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Index-based insurance, also kn ...... make use of satellite imagery.
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*Category
*List of topics
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Insurance by country
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Insurance policy and law
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Other
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Types of insurance
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List
* Australia
* China
* India
* Pakistan
* United Kingdom
* United States
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*History of insurance
*Unitised insurance fund
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*Insurance policy
*Insurance l ...... ntability Act
*Insurance fraud
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Insurance
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Index-based insurance, also kn ...... ificantly influences a farmer’
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Index-based insurance
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