Microinsurance India

FESA Micro Insurance Report – Methodology, Validation and Contract Design

The FESA Report can be purchased for 150 Euro

The FESA project is one of the Milennium projects of the Dutch Minister of Development Cooperation. The objective of the project is to develop a Meteosat based drought micro-insurance system that can reach every farmer in Africa. Partners in the project are MicroEnsure , RABO Development and Ecorys.

The FESA approach is based on 30 years of hourly Meteosat data, which have been processed to climatic data products, in particular temperature, radiation and evapotranspiration. These are then used to generate crop yield estimates or indices and to derive the necessary drought probability statistics for every location on a 3 km grid. The indicators used for drought and crop failure are the growing season relative evapotranspiration (RE) and relative yield (RY).

The first phase of the project has been completed. This phase adressed data base development, data validation and elements of insurance design. A comparative burn-study was carried out for 29 locations in Tanzania, using ground measured precipitation and satellite derived evapotranspiration respectively. The study has revealed great opportunities for reducing basis risk, scaling up and cost reduction.

The results have been consolidated in the printed report “FESA Micro-insurance: methodology, validation, contract design”. The report price is 150 euro. It can be ordered by sending us an email through our ordering page. Please write “FESA report” in the first line. Order it today by using this contact form.

FESA Microinsurance Report

Report contents

FOREWORD by Prof Kees Stigter

Founding president of International Society for Agricultural Meteorology

7
1INTRODUCTION9
1.1Traditional crop insurance10
1.2Index-based insurance10
1.3Satellite indices11
1.3.1Reflection indices12
1.3.2Precipitation12
1.3.3Evapotranspiration13
1.3.4Crop yield13
1.4Report objective and scope13
2DERIVING CLIMATIC DATA FROM METEOSAT15
2.1Rainfall monitoring15
2.2Evapotranspiration monitoring16
2.2.1Calibration16
2.2.2Atmospheric correction16
2.2.3Air temperature mapping17
2.2.4Observation height air temperature17
2.2.5Net radiation18
2.2.6Sensible heat flux18
2.2.7Actual evapotranspiration18
2.2.8Relative evapotranspiration19
3CROP YIELD ESTIMATION AND FORECASTING21
3.1Conversion of solar energy into dry matter22
3.2Water limitation to growth22
3.3Light use efficiency22
3.4Dry matter production23
3.5Respiration loss23
3.6Net dry matter production24
3.7Crop calendar24
3.8Relative and difference yield25
3.9Combination with geographic information26
4VALIDATION OF METEOSAT DERIVED DATA29
4.1Validation approach29
4.2Validation pitfall30
4.3Validation results31
5DATABASE GENERATION AND DATA PROPERTIES33
5.1Extracting a long term data set from Meteosat33
5.2Similarity and difference of evapotranspiration and precipitation data34
5.3Comparison of evapotranspiration and precipitation time series34
5.4Mass balance of evapotranspiration and precipitation35
5.5Phase shift between evapotranspiration and precipitation37
5.6Distribution of decadal evapotranspiration and precipitation data37
5.7Determination of percentile trigger values37
6ELEMENTS OF CONTRACT DESIGN39
6.1Current state of the art39
6.1.1Starting the growing season41
6.1.2Contract parameters vary considerably41
6.1.3Critical dependence on growing season start41
6.2Using historic data series for timing the growing season43
6.3Determination of the sowing window43
6.4Comparing evapotranspiration and precipitation based insurance performance45
6.4.1Trigger percentiles46
6.4.2Growing season structure47
6.5Towards scaling up and cost reduction49
6.5.1Trigger modelling49
6.5.2Zoning approach51
6.6Building trust51
6.7Summarized findings in this chapter53
7SUMMARY AND CONCLUSIONS55
ACKNOWLEDGEMENTS59
REFERENCES61
ANNEX A:  FESA VALIDATION OF EWBMS CLIMATIC DATA65
A.1Validation of air temperature65
A.2Validation of radiation70
A.3Validation of sensible heat flux72
A.3.1Validation with CARBOAFRICA data72
A.3.2Validation with Marconi FLUXNET data73
A.4Conclusion77
ANNEX B:  FESA VALIDATION OF ECGM CROP YIELDS79
B.1Validation data sources79
B.2Validation of satellite derived crop yield79
B.3Crop yield validation results81
B.3.1West Africa 81
B.3.2Southern Africa 81
B.3.3Burkina Faso 82
B.3.4Tanzania 84
ANNEX C:  VALIDATION RESULTS FROM RECENT PROJECTS87
C.1China: YellowRiver Basin87
C.2Mongolia90
C.3Netherlands93
To Top