Time, Stress & Work Life Balance for Clerks with Beckie Whitehouse
IFPRI-New technologies for better Insurance: Picture Based Crop Insurance-Berber Kramer
1. New technologies for better insurance:
Picture Based Crop Insurance
Berber Kramer (B.Kramer@cgiar.org)
IFPRI Research team:
Miguel Robles (M.Robles@cgiar.org)
Francisco Ceballos (F.Ceballos@cgiar.org)
New Delhi, December 21 2016
2. Why do farmers lack crop insurance?
• Farmers too remote and too small for indemnity insurance
• Administrative costs
• Costs of loss verification
• Monitoring of cheating / Moral hazard
• Index insurance
• Basis risk
• Beyond the control of the farmer
• Technological innovations:
• Satellites: Difficult to understand, cloud cover
• Drones: Better resolution but high operational cost
• Generally: High biodiversity and small scale
• How to bundle the best of these worlds?
3. Opportunity:Rise of Smartphones
Source: Global Attitudes Spring 2015 & 2014, PEW Research Center
In 2015, there were 220 million unique smartphone users in India
4. Greenness index estimation
Onlineserver
GCC reference curve
GCC curve
Machine learning
Low-cost loss
assessment
Farmers
take
pictures
Additional information
CCE
A hybrid insurance approach
5. Wecantestwaystolimitmoralhazard
Remote sensing from above to detect
anomalous behavior?
Use nearby
farmers as a
benchmark?
Pictures, data, sensors
Experts
/Agronomists
- Weather
stations
- Satellite
images…
Agro-advise
Use agro-advisories?
6. Bundled with other services
• Use pictures to provide agro-advisory services
• This is a natural complementarity
• PBI is already collecting rich field data
• Data can be analyzed by experts to provide advise
• Incentive to report truthfully and not cheat the system
Pictures, data, sensors
Experts
/Agronomists
- Weather
stations
- Satellite
images…
Agro-advise
7. What do we need to get there?
• Pictures and data for machine learning
• Not only pictures of damage: Algorithms will need
both damaged and non-damaged pictures
• Not only data on yields: Farmers’ perceived damage,
causes of damage, practices, etc.
• High-frequency at first in order to estimate optimal
frequency and need for standardization
• Farmers’ interest in such products
• Not only their willingness to pay
• Also impacts on behavior: investments and cheating
10. Smartphone app
• Android app
• User friendly
• Facilitates taking pictures at exactly same location
• Relies on GPS coordinates
• Short survey after taking picture
• Important for later analysis
• Input use and practices
• Currently standardized procedures with reference poles
and auxiliary poles
Wheat Cam
24. As of now, 290 (22.02%) pictures where farmer
selected ‘Yes’.
- 3 fully damaged
- 33 partially damaged
- 257 slightly damaged
No visible damage in 11.7% of these pictures.
34. Advantages and Disadvantages
If smartphone pictures accurately capture damage, then
picture-based crop insurance can contribute:
Lower basis risk (going back to indemnity product)
Easy to understand, easy to relate to (farmer is at the center)
Complements weather index-based products
Leverages increasing use of smart-phones
Feasible for the insurance companies
Main risk: Potential moral hazard
To what extent is there moral hazard? (this year)
How to design the product to limit potential hazard?