Index insurance, climate risk management and gender equality
Jon Hellin and Eleanor Fisher report on developments in understanding how improved insurance design can help reduce gender inequality. By courtesy of the Micro Insurance Network.
There is growing interest in how inclusive insurance can contribute to fulfilling the Sustainable Development Goals (SDGs).1 Climate change, however, threatens our ability to achieve some of the goals, not least SDG1 (End Poverty) and SDG2 (End Hunger). Furthermore, there are significant differences in the risks faced by men and women, which could lead to climate change undermining SDG5: to achieve gender equality and empower all women and girls.
Advocates see index insurance as a tool for agricultural climate risk management. There is growing evidence that it enables farmers to adapt to climate change by facilitating the adoption of climate-smart agricultural technologies and practices. Index insurance has scaled up in recent years and now reaches millions of farmers. However, a narrow focus solely on numbers obscures the socio-economic dynamics in which index insurance is of benefit to some farmers but not others. Little attention has focused on how existing gender inequalities determine farmers’ access to insurance products or whether uptake of products accentuates or mitigates gendered differences, with potential for negative impact on women.
Since 2014, the authors of this paper have worked on an index insurance research project supported by CGIAR’s Research Program on Climate Change, Agriculture and Food Security (CCAFS). We have come to appreciate that, while index insurance may help reduce vulnerability, differential access to insurance products by female and male farmers, and systematic variation of impacts, can reinforce existing inequalities. In effect this could negate the contribution of index insurance to achieving SDG5.
Women represent an untapped target group for insurance with high growth potential. There is a social and business case for factoring gender into the design and implementation of inclusive insurance. Regarding SDG5, a key issue is to improve the design, implementation, and monitoring and evaluation of inclusive insurance initiatives so that they achieve greater gender equality. We argue that our equity assessment framework should be used to capture the predicted and actual impact of inclusive insurance on gender equality. Recognising the importance of gender equality is a fundamental step towards ensuring that inclusive insurance does not undermine the realisation of SDG5.
Gender equity assessment framework
There are differences between equality and equity. Equality refers to equal enjoyment by women and men of opportunities, resources and rewards. Gender equity, on the other hand, relates to being fair to both men and women; it may mean treating men and women differently in order to remove gender barriers, and thus ensure equal outcomes. For example, gender barriers to index insurance may mean women are targeted differently in order to facilitate their access to the product and ensure equal outcomes with men.
Gender barriers can be considerable. When women struggle to own land, or their land is controlled by male relatives or husbands, it raises questions of whether women can legally access insurance. Similarly, few women whose husbands have migrated have land titles in their names, and they are therefore ineligible for insurance schemes. In 2016, the Government of India launched the new Prime Minister’s Crop Insurance Scheme aimed at poorer, marginalised farmers. However, lack of documentation and written proof of land tenancy excludes some tenant farmers, women and marginal farmers from insurance cover.
The equity assessment framework in Table 1 can help practitioners understand the factors driving gender inequality, as well as helping to improve insurance design, implementation and evaluation. It can also assist in identifying when and where issues of gender equity and equality require specific interventions. It is relevant to both public and private sectors, and could be promoted by donors when index insurance is included in development and risk management programmes.
Table 1: Equity assessment framework
Table 1:Equity assessment framework
When it comes to accessing and taking up insurance, focusing on procedural equity helps prioritise gender issues. The Index-Based Livestock Insurance (IBLI) product in Northern Kenya, established by the International Livestock Research Institute (ILRI) more than ten years ago, provides interesting insights. IBLI aims to mitigate drought-induced livestock losses among pastoralists, by combining satellite observations of forage conditions with livestock mortality rates to calculate clients’ seasonal payouts. At one of the first meetings in Northern Kenya, organised by a local insurance sales team to explain how the product works, the overwhelming majority of those attending were male elders, together with a handful of older women. Cultural norms in the region prevent younger women from attending, but scheduling a separate meeting for them would have enabled their inclusion.
Paying attention to the knowledge and experience of women also helps the design of an insurance product. IBLI has a strong emphasis on social equity, including gender – for example, the poorest families with very small herd sizes (in some cases only one goat or sheep) are able to access insurance. This is important in a region with frequent correlation between herd composition and ethnic background and/ or gender, and as a result much effort has gone into training sales agents and potential clients to ensure insurance is not only bought by the educated or those living near larger communities. Without consistent support from development partners and donors, it is unlikely that IBLI’s focus on procedural equity would have become well established in marginalised areas, although it is possible that alternative interventions such as cash transfer programmes may work better than insurance in some cases.
There is a strong business case for paying attention to gender in ways that permit us to treat women equally in the design and implementation of microinsurance products. SDG5 can be a vehicle for gender equitable action. The attraction of index insurance can nevertheless mask issues of power, social inequality and differential impact. We need to recognise the danger of implicitly reinforcing gender inequality through the design and delivery of index insurance. More consideration must be given to how take up of index insurance is shaped by existing gender inequalities and, in turn, how these inequalities can contribute to different development outcomes for male and female farmers and pastoralists.
Addressing the issue of gender equality in index insurance programmes may initially increase costs, but the additional investment may also lead to market expansion and economies of scale, as well as contributing more substantially to achieving the SDGs. We propose that gender equality should be explicitly factored into index insurance design and implementation in order to avoid reinforcing existing inequalities, and to enhance gender equality in climate risk management. Growing interest in inclusive insurance and poverty reduction can help mitigate trade-offs between realising some SDGs whilst thwarting others. This in turn contributes to more and better practices of mainstreaming gender-sensitive approaches that create lasting impact for both men and women.
 Patt, A., Peterson, N., Carter, M. Velez, M., Hess, U. and Suarez, P. Making Index Insurance Attractive to Farmers. Mitigation and Adaption Strategies for Global Change, 2009. 14 (8): 737-753. DOI:10.1007/s11027-009-9196-3.
 Hess, U. and Hazell, P. Innovations and Emerging Trends in Agricultural Insurance Innovations, (2016). Available at: https://www.researchgate.net/profile/Ulrich_Hess/ publication/283089244_Innovations_and_ememerging_ Trends_in_Agricultural_Insurance/links/562a527408ae04c2aeb1856d.pdf.
 Müller, B., Johnson, L. and Kreuer, D. ‘Maladaptive outcomes of climate insurance in agriculture’, Global Environmental Change. Elsevier Ltd 46 (November 2016): 23–33. doi: 10.1016/j.gloenvcha.2017.06.010.
[5.] CGIAR (formerly known as the Consultative Group on International Agricultural Research) was established in 1971 and is a global partnership that unites organisations engaged in research for a food-secured future.
 Miles, K., Wiedmaier-Pfister, M., & Dankmeyer, M.-C. Mainstreaming Gender and Targeting Women in Inclusive Insurance: Perspectives and Emerging Lessons – A Compendium of Technical Notes and Case Studies, (Bonn and Eschborn, Germany: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, 2017).
 Khalai, D. Women, age and livestock insurance – a story from northern Kenya, (2016). Available on the IBLI website at https://ibli.ilri.org/staff-insights/ (accessed on 4 November 2016).
 Jensen, N. D., Barrett, C. B., & Mude, A. G. Cash transfers and index insurance: A comparative impact analysis from northern Kenya. Journal of Development Economics, 129 (July 2016), 14-28. https://doi.org/10.1016/j.jdeveco.2017.08.002.