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The International Institute for Agriculture Risk Management was established to support the development of new, targeted risk

transfer mechanisms for agricultural production (crop insurance) in both emerging markets and developed countries. Institute courses and workshops provide expertise and assistance to clients in designing crop insurance programs, developing local expertise and instilling governance models within an agricultural policy framework that could be adapted to other sectors of the local economy. The benefits and demand for such crop insurance programs in developing countries is documented in sigma 1 :

Few emerging markets currently offer sufficient insurance coverage against the broad range of production risks inherent in agriculture activities. Total agricultural insurance premiums in emerging markets were estimated at around USD 1.1 billion in 2005, less than 20% of the global total, although emerging markets account for nearly 70% of food production worldwide. A properly-designed risk management system is thus essential for protecting farm operators and reinforcing rural development .... Government efforts in improving rural financial infrastructures and weather data collection, for example, can also ease insurers access to potential clients and support their underwriting activities.2

Risk management innovations in agriculture, including crop insurance in a myriad of forms, are generating growing international interest as a mechanism to support rural economies. This interest originates with the private insurance/reinsurance industry, farmers in emerging markets, and governments in developed and emerging markets exploring new approaches for a rapidly growing international food system. Risk management solutions for agriculture are technical in nature. They often require an integration of stakeholder roles within clear governance models, incorporation into a local agriculture policy framework and, because of unique risk profiles (highly correlated exposures), need access to international risk capacity to be viable over time.

Historically, many new crop insurance programs in developing countries have met with limited success due to insufficient knowledge, capability, capacity, or governance/infrastructure to support principled design and administration. Given the importance of technical support, training, education and research for local participants at both the private and public level is integral to success. The Institute incorporates academic courses and practical hands-on and interactive program development workshops , the most efficient approach for transferring knowledge to a wide variety of clients.

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Sigma is an award-winning, Swiss Re research series on the insurance industry. Swiss Re, sigma No 1/2007, pp 3-4.

Goals for the Institute

Developing Countries: To develop sustainable agricultural risk management programs for developing countries that result in economic stability and n ew sources of risk capital for their agriculture sectors.

Developed Countries: To provide a training, succession planning, and analytical research capability environment for developed country governments and private companies engaged or expanding their work in agricultural risk management.

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2010 International Institute for Agriculture Risk Management