A theoretical model for the willingness to pay (WTP) or demand, for Weather Index Insurance (WII) by a farmer who insures in the beginning of the year and is compensated later is the first step in determining a fair value for insurance. The larger the degree of risk aversion, the larger the benefit of or the demand for the insurance farmers will have. However, there is a degree of unpredictable deviation of resources and because of this uncertainty farmers have a larger WTP.

This presentation is based on the AMA Innovation Lab projects for the Microfinance Products for Weather Risk Management in Developing Countries. This workshop approaches the efforts and difficulties of pursuing index-based weather insurance as a sustainable market-based product.

This presentation took place in Paris, France on June 25, 2014 and was presented by Alexandros Sarris.