Sustainable insurance solutions for agricultural and climate risk requires a joint effort of both the public and the private sector:  the partners need to cooperate and commit to facilitating a market development process. 

Private insurance companies design appropriate insurance products, establish administrative processes and carry the risk. They invest financial and human resources and commit themselves to the agricultural and climate risk insurance markets. 

 

Government support that goes beyond creating an enabling regulatory environment can be critical to the sustainability of such systems. This support can take different forms, including premium subsidies, tax exemption or act as a reinsurer of last resort. 

 

The public sector can also foster market development and bear part of the high start-up costs by investing in data market infrastructure and weather stations, product design and rating as well as awareness creation, education and training. Donors and development agencies can provide additional assistance during this initial investment phase. A product alone is not enough