Abstract

This review of index-based agricultural insurance for the Climate Resilient Agribusiness for
Tomorrow—CRAFT (https://crafteastafrica.org/) project was part of a wider effort to strengthen
understanding in the enabling environment for scaling in CRAFT interventions. The findings can be
used to design an appropriate agricultural insurance intervention in future.
Climate-smart crop insurance is one of the interventions that was proposed in the project.
Smallholder farmers and agribusinesses (SMEs and cooperatives) often lack access to financial
services such as insurance, which could help them to prepare, invest, safeguard, and adapt.
Opportunities for tailored index-based insurances to cover climate-related crop losses are still
underdeveloped in eastern Africa. Further, there is a possibility of the risk or likelihood or prospect
of climate change to raise insurance prices. Hence the urgent need to help climate-proof the CRAFT
project value chains through financial services such as insurance. In the wider CRAFT enabling
environment, there were opportunities for access to insurance services that were either not yet
developed (such as tailored index-based insurances to cover for climate-related crop losses) or did
not experience sufficient incentives due to high risks and uncertainties, including those related to
climate change. East African governments need support in facilitating access to these financial
services for agribusinesses and entrepreneurial farmers