Insurance market development – India

The Indian market has a long-lasting experience with insurance schemes. The first public „Comprehensive Crop Insurance Scheme (CCIS)“ was introduced in 1985 and in subsequent years large area-yield based crop insurance schemes for smallholders followed. In 2003, a private insurer piloted a weather index-based crop insurance with international technical assistance and in 2007, the Government of India integrated it into the public subsidized agricultural insurance scheme. Today, the Government of India supported crop insurance schemes cover more than 40 million farmers.

The German technical contribution to the InsuResilience Global Partnership seeks to advance the Indian market by introducing innovative climate risk insurance solutions to make them more accessible and affordable for poor and vulnerable people, who are often engaged in informal sector activities. Thereby, innovation can have different manifestations, e.g. extending the class of beneficiaries beyond farmers, introducing new product concepts or technologies.

The work of the GIZ global project InsuResilience in India has currently three work streams. The first one is focused on rolling out a product bundle innovation. For this purpose, GIZ is collaborating with an Indian Fintech bringing in a network of product and distribution partners to offer demand-orientated, tailor-made financial bundled products to a low-income customer segment. The bundled product solutions lower transaction costs by integrating financial product layers like savings, credit and insurance into one solution. A mobile phone application enables field staff of local distribution partners (i.e. MFIs, cooperative banks or self-help organizations) to profile customers and to suggest a tailor-made product bundle corresponding with individual customer needs and risks. More frequent and more intense extreme weather events require inclusive natural catastrophe (NatCat) insurance solutions to protect poor and vulnerable people against extreme weather related income losses. For this reason, GIZ global project InsuResilience intends to design and implement an index-based NatCat insurance solution to be integrated into the Indian Fintech’s product portfolio. In order to prevent or at least to mitigate negative coping strategies, the NatCat insurance will cover monthly savings contributions and monthly credit instalments as well as losses to houses (future option). This represents a novelty. Customers benefiting from this product concept will be farmers, laborers and micro-entrepreneurs. The pilot is intended to be rolled out in Bihar prior to monsoon season 2019.

The second work stream has the objective to develop a concept for a satellite-based flood index insurance. Current activities have a distinct research & development character, i.e. GIZ is evaluating the technical opportunities and limitations of the use of Sentinel-1 and Sentinel-2 satellites, which provide data free of charge. Initial work on mapping floods based on satellite data was conducted by the German Aerospace Center (DLR) and US start-up Cloud to Street. The collaboration with DLR will last until September 2019 and has the objective to build automated flood detection processors based on Sentinel-1 and Sentinel-2 satellites. Such flood-monitoring methods shall deliver the parameters needed for a flood index insurance solution. However, it will most likely be necessary to also exploit additional satellite sources and apply numerical flood modelling approaches as well as digital elevation models in order to deliver robust parameters. Considering the growing quantity and quality of satellite data, a satellite-based flood index insurance is a promising approach to protect low-income households in developing and emerging countries from flood hazards.

The third work stream of GIZ global project InsuResilience in India focuses on piloting a Blockchain technology based Farm Income Protection Plan. Contracted farmers are obligated to fulfil certain pre-conditions (i.e. use of preventive spray, high-quality seeds or other farming best practices) in order to receive compensation when experiencing income losses due to weather- or production related risks. The use of Blockchain technology increases transparency, traceability and trust within the value chain and helps to create a scalable and robust information system for contracting purposes.

For more information, please contact Ulrich Hess (, Oliver Milosch (, Dr. Nihar Jangle (, and Dr. Vaibhav Sharma (