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Statistical Analysis of Rainfall Insurance Payouts in Southern India / Gine, Xavier

World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online

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Format:
Book
Government document
Author/Creator:
Gine, Xavier
Contributor:
Gine, Xavier
Townsend, Robert
Vickery, James
Series:
Policy research working papers.
World Bank e-Library.
Language:
English
Subjects (All):
Debt Markets.
Deposit Insurance.
Emerging Markets.
Federal Reserve.
Federal Reserve Bank.
Federal Reserve System.
Finance and Financial Sector Development.
Financial Institution.
Financial Support.
Hazard Risk Management.
Insurance.
Insurance Policies.
International Bank.
Labor Policies.
Microinsurance.
Private Sector Development.
Risk Factors.
Social Protections and Labor.
Urban Development.
Local Subjects:
Debt Markets.
Deposit Insurance.
Emerging Markets.
Federal Reserve.
Federal Reserve Bank.
Federal Reserve System.
Finance and Financial Sector Development.
Financial Institution.
Financial Support.
Hazard Risk Management.
Insurance.
Insurance Policies.
International Bank.
Labor Policies.
Microinsurance.
Private Sector Development.
Risk Factors.
Social Protections and Labor.
Urban Development.
Physical Description:
1 online resource (20 pages)
Place of Publication:
Washington, D.C., The World Bank, 2007
System Details:
data file
Summary:
Using 40 years of historical rainfall data, this paper estimates a distribution for payouts on rainfall insurance policies offered to farmers in the State of Andhra Pradesh, India, in 2006. The authors find that the contracts primarily protect households against extreme tail events; half the expected value of indemnities paid by the insurance are generated by only 2 percent of rainfall realizations. Contract payouts are significantly correlated cross-sectionally, and also inversely associated with real GDP growth. The paper discusses the implications of these findings for the potential benefits of insurance to households, the risks facing a financial institution underwriting rainfall insurance contracts, and pricing.

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