In 2008, the Microinsurance Innovation Facility provided grant funding to Planet Guarantee (in partnership with AGF Afrique and Swiss Re) for a feasibility study of index-based insurances for cotton producers in Mali. Three types of indices were evaluated. Given the high basis risk of the weather index and the technical resources required for the satellite-based index, the area yield-based index was selected as the most promising approach. Because it captures any variation at the district level, it incorporates almost all variables and offers a very high correlation with farmers' loss.

Abby Gray
International Labour Office (ILO)
Microinsurance Innovation Facility
Geneva, Switzerland
microinsurancemedia@ilo.org