Book chapter
Quantitative Risk Management in Agricultural Business · 2025 · pp. 5-39
DOI: 10.1007/978-3-031-80574-5_2
Published online: 2025-04-01 · Download citation (BibTeX)
Abstract
Index insurance has become a notable risk management tool in response to increasing climate variability and extreme weather events. This chapter offers a thorough review of innovative index-based financial solutions, focusing on index insurance. It explores the essential principles of index insurance, including its actuarial framework, empirical research findings, and practical considerations. Furthermore, the chapter looks ahead to future developments in index insurance, spotlighting the integration of advanced technologies such as artificial intelligence and blockchain. These technological innovations have the potential to significantly refine risk modeling and claims processing, thereby improving the overall structure of index insurance. Aimed at researchers, practitioners, and policymakers, this chapter serves as a comprehensive guide for designing effective index insurance programs that enhance resilience in the face of climate uncertainties.
Keywords: Index insurance; basis risk; climate change; weather risk management; machine learning; artificial intelligence; blockchain insurance