Is there a commercially viable market for crop insurance in rural Bangladesh?

Sonia Akter, Roy Brouwer, Saria Choudhury, Salina Aziz

    Research output: Contribution to journalArticle

    Abstract

    The study aims to assess the commercial viability of a potential crop insurance market in Bangladesh. In a large scale household survey, agricultural farm households were asked for their preferences for a hypothetical crop insurance scheme using double bounded (DB) contingent valuation (CV) method. Both revenue and production cost based indemnity payment approaches were applied to assess the commercial viability of a crop insurance program assuming a partner-agent (PA) model of insurance supply. Crop insurance is found marginally commercially viable in riverine flood plain areas. The expected indemnity payable consistently exceeds the expected insurance premium receivable by the insurer for the households living in wetland basin and coastal floodplain. We conclude that a uniform structure of crop insurance market does not exist in Bangladesh. The nature of the disaster risks faced by the farm households and the socio-economic characteristics of the rural farm communities need to be taken into careful consideration while designing such an insurance scheme.
    Original languageEnglish
    Pages (from-to)215-229
    JournalMitigation and Adaptation Strategies for Global Change
    Volume14
    Issue number3
    DOIs
    Publication statusPublished - 2009

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