28 O Hasu and T-K Lehtonen
the insurantial perception of soil is made up, or – to paraphrase the famous
text by James Scott (1998) – what ‘seeing like an index insurance’ entails.
The structure of the chapter is as follows. First, we explicate the way in
which the index insurance is assembled according to the RM document.
Then, we explain how at the core of the instrument’s operations is mapping
a region and modelling differences between areas in that region. This leads
us to the next two sections. In the first, we describe RM’s different ways of
spatialising time in the modelling work, and then, in the second, go deeper
into how the advertised forms of modelling in fact completely exclude environmental change. Finally, we conclude by highlighting our surprising main
finding: although index insurance is promoted by GIIF as a tool that helps
deal with climate change, the programmatic guide that it proposes for practical uses, RM, completely bypasses this theme area and narrows stakeholders’ attention to the technical calculations of local payout ratios.
The objectives of the index
In RM, the World Bank renders index insurance comprehensible for a variety of stakeholders and explains how it can be used to manage the agricultural economy in developing countries. After a general introduction to the
purpose of index insurance, RM consists of two substantial parts: the first
describes and advertises the decision tools available for insurance managers, and the second explains how probabilistic modelling works for insurance analysts. Altogether, the document is 315 pages long. In the very first
pages of RM, the authors discuss who they see as its ideal audience and
for whom the detailed exposition of the advertised risk management tool
will be useful. The primary readership will be composed by ‘managers and
actuarial analysts of insurance companies in developing countries’ but also
by more local intermediaries through whom small farmers and their service
providers can be reached: the ‘[f]armer organizations, financial institutions,
and agriculture value chain actors and investors evaluating the potential
benefits and risks of index insurance policies’ (RM: 1). In addition, the
authors see RM as a useful document both to regulators involved in ‘assessing insurance products for client value and consumer protection purposes’
and students ‘interested in quantitative risk analysis and probabilistic modeling’ (RM: 1). While expecting to persuade such a broad constituency to
develop active interest in the tool, the authors state even broader aims in the
Foreword; they hope that the instrument will not only advance ‘financial
inclusion’ but also increase investment in ‘smart agricultural technologies’
(RM: xvii). Behind all this is the idea that the agricultural sector in developing countries deserves more attention from global financiers. The ‘unserved
market segment’ of small farmers can form an ‘attractive customer base’
for insurers and, consequently, the guide is presented as a tool that helps
‘emerging market insurers’ to ‘penetrate new market segments’ (RM: xvii;
see also RM: 83).
the insurantial perception of soil is made up, or – to paraphrase the famous
text by James Scott (1998) – what ‘seeing like an index insurance’ entails.
The structure of the chapter is as follows. First, we explicate the way in
which the index insurance is assembled according to the RM document.
Then, we explain how at the core of the instrument’s operations is mapping
a region and modelling differences between areas in that region. This leads
us to the next two sections. In the first, we describe RM’s different ways of
spatialising time in the modelling work, and then, in the second, go deeper
into how the advertised forms of modelling in fact completely exclude environmental change. Finally, we conclude by highlighting our surprising main
finding: although index insurance is promoted by GIIF as a tool that helps
deal with climate change, the programmatic guide that it proposes for practical uses, RM, completely bypasses this theme area and narrows stakeholders’ attention to the technical calculations of local payout ratios.
The objectives of the index
In RM, the World Bank renders index insurance comprehensible for a variety of stakeholders and explains how it can be used to manage the agricultural economy in developing countries. After a general introduction to the
purpose of index insurance, RM consists of two substantial parts: the first
describes and advertises the decision tools available for insurance managers, and the second explains how probabilistic modelling works for insurance analysts. Altogether, the document is 315 pages long. In the very first
pages of RM, the authors discuss who they see as its ideal audience and
for whom the detailed exposition of the advertised risk management tool
will be useful. The primary readership will be composed by ‘managers and
actuarial analysts of insurance companies in developing countries’ but also
by more local intermediaries through whom small farmers and their service
providers can be reached: the ‘[f]armer organizations, financial institutions,
and agriculture value chain actors and investors evaluating the potential
benefits and risks of index insurance policies’ (RM: 1). In addition, the
authors see RM as a useful document both to regulators involved in ‘assessing insurance products for client value and consumer protection purposes’
and students ‘interested in quantitative risk analysis and probabilistic modeling’ (RM: 1). While expecting to persuade such a broad constituency to
develop active interest in the tool, the authors state even broader aims in the
Foreword; they hope that the instrument will not only advance ‘financial
inclusion’ but also increase investment in ‘smart agricultural technologies’
(RM: xvii). Behind all this is the idea that the agricultural sector in developing countries deserves more attention from global financiers. The ‘unserved
market segment’ of small farmers can form an ‘attractive customer base’
for insurers and, consequently, the guide is presented as a tool that helps
‘emerging market insurers’ to ‘penetrate new market segments’ (RM: xvii;
see also RM: 83).