Developing Parametric Insurance for Weather Related Risks for Indonesia
Indonesia is one of the main agriculture producers globally and largely relies on domestic staples for its growing population. Projections of climate change models for Indonesia point towards increasing temperatures and more extreme distributions o...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/704171524632990898/Indonesia-Developing-parametric-insurance-for-weather-related-risks-for-Indonesia http://hdl.handle.net/10986/29784 |
| id |
okr-10986-29784 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-297842021-05-25T09:14:13Z Developing Parametric Insurance for Weather Related Risks for Indonesia World Bank Group RICE PRODUCTION NATURAL DISASTER CATASTROPHE INSURANCE DROUGHT CLIMATE CHANGE DISASTER RISK CLIMATE CHANGE ADAPTATION WEATHER FORECASTING EXTREME WEATHER AGRICULTURAL FINANCE PRECIPITATION INDEX RAINFALL RISK MANAGEMENT Indonesia is one of the main agriculture producers globally and largely relies on domestic staples for its growing population. Projections of climate change models for Indonesia point towards increasing temperatures and more extreme distributions of precipitation with more frequent dry and wet periods. The Government of Indonesia (GoI) has been focusing on modernizing rice production through improved irrigation infrastructure and early warning systems to better cope with developing droughts and support schemes for rice farmers. While governments use risk transfer solutions mostly for infrastructure, parametric insurance covers have become increasingly available for agriculture assets including crops, livestock, and forestry. This study investigates the development of a parametric insurance product as an ex ante risk management instrument that relies on regional drought indices and provides province-level payouts to the GoI in case of severe droughts. As a case study, the province of Central Java has been chosen given its importance in rice production and a recent request of the Central Java Government to transfer drought risk. This study uses over 50 years of historical gridded precipitation and temperature data to develop standard precipitation indices (SPI) and standard precipitation evapotranspiration indices (SPEI) to quantify drought extents at a resolution of 50 x 50 km. Preliminary results of this study have been shown and discussed with the Ministry of Agriculture of Central Java, the National Weather Service of Indonesia (BMKG), the Office of the Insurance Regulator, the Ministry of Finance, and leading Indonesian insurers in the form of workshops undertaken in Indonesia (Semarang and Jakarta) in July 2017. The availability of longer seasonal rice production data will improve the validation of the developed indices. 2018-05-03T21:07:21Z 2018-05-03T21:07:21Z 2018-01 Report http://documents.worldbank.org/curated/en/704171524632990898/Indonesia-Developing-parametric-insurance-for-weather-related-risks-for-Indonesia http://hdl.handle.net/10986/29784 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Other Agriculture Study Economic & Sector Work East Asia and Pacific Indonesia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
RICE PRODUCTION NATURAL DISASTER CATASTROPHE INSURANCE DROUGHT CLIMATE CHANGE DISASTER RISK CLIMATE CHANGE ADAPTATION WEATHER FORECASTING EXTREME WEATHER AGRICULTURAL FINANCE PRECIPITATION INDEX RAINFALL RISK MANAGEMENT |
| spellingShingle |
RICE PRODUCTION NATURAL DISASTER CATASTROPHE INSURANCE DROUGHT CLIMATE CHANGE DISASTER RISK CLIMATE CHANGE ADAPTATION WEATHER FORECASTING EXTREME WEATHER AGRICULTURAL FINANCE PRECIPITATION INDEX RAINFALL RISK MANAGEMENT World Bank Group Developing Parametric Insurance for Weather Related Risks for Indonesia |
| geographic_facet |
East Asia and Pacific Indonesia |
| description |
Indonesia is one of the main agriculture
producers globally and largely relies on domestic staples
for its growing population. Projections of climate change
models for Indonesia point towards increasing temperatures
and more extreme distributions of precipitation with more
frequent dry and wet periods. The Government of Indonesia
(GoI) has been focusing on modernizing rice production
through improved irrigation infrastructure and early warning
systems to better cope with developing droughts and support
schemes for rice farmers. While governments use risk
transfer solutions mostly for infrastructure, parametric
insurance covers have become increasingly available for
agriculture assets including crops, livestock, and forestry.
This study investigates the development of a parametric
insurance product as an ex ante risk management instrument
that relies on regional drought indices and provides
province-level payouts to the GoI in case of severe
droughts. As a case study, the province of Central Java has
been chosen given its importance in rice production and a
recent request of the Central Java Government to transfer
drought risk. This study uses over 50 years of historical
gridded precipitation and temperature data to develop
standard precipitation indices (SPI) and standard
precipitation evapotranspiration indices (SPEI) to quantify
drought extents at a resolution of 50 x 50 km. Preliminary
results of this study have been shown and discussed with the
Ministry of Agriculture of Central Java, the National
Weather Service of Indonesia (BMKG), the Office of the
Insurance Regulator, the Ministry of Finance, and leading
Indonesian insurers in the form of workshops undertaken in
Indonesia (Semarang and Jakarta) in July 2017. The
availability of longer seasonal rice production data will
improve the validation of the developed indices. |
| format |
Report |
| author |
World Bank Group |
| author_facet |
World Bank Group |
| author_sort |
World Bank Group |
| title |
Developing Parametric Insurance for Weather Related Risks for Indonesia |
| title_short |
Developing Parametric Insurance for Weather Related Risks for Indonesia |
| title_full |
Developing Parametric Insurance for Weather Related Risks for Indonesia |
| title_fullStr |
Developing Parametric Insurance for Weather Related Risks for Indonesia |
| title_full_unstemmed |
Developing Parametric Insurance for Weather Related Risks for Indonesia |
| title_sort |
developing parametric insurance for weather related risks for indonesia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/704171524632990898/Indonesia-Developing-parametric-insurance-for-weather-related-risks-for-Indonesia http://hdl.handle.net/10986/29784 |
| _version_ |
1764470236592996352 |