How Bigger Data and Better Analysis Supports Financial Access
Presented by MetLife Foundation in collaboration with WSJ. Custom Studios, Multipliers of Prosperity takes a look globally at the challenges we face in confronting the issues of financial inclusion. The program dives deep into what’s working, questions what isn’t and finds the possible fixes. Most importantly, the program chronicles the triumphs of people who have taken the steps toward financial stability and the providers who have helped them reach those goals. We explore how financial stability is created, the kind of finance models that have succeeded, and innovative new channels and technology that make for smart solutions.
Like farmers everywhere, those in rural India have long been subject to the ravages of weather, from droughts to destructive storms. But until recently, few Indian small subsistence farmers had access to crop insurance because many providers didn’t find the market commercially viable. Notably, insurance companies lacked data about the farmers, their crops and even the weather.
But over the past several years, insurers have begun accessing weather-station data and satellite imagery to document unfavorable swings in rainfall and temperature so they can better estimate the risk in insuring these farmers.
This analysis has given insurers greater confidence and information necessary to extend insurance to farmers who may otherwise have been left out, explains Greg Chen, senior financial sector specialist for the Consultative Group to Assist the Poor (CGAP), a global partnership housed at the World Bank. The indexes, for rainfall or temperatures, are created from measurements taken at weather stations or derived from satellite imagery. The advances in weather-indexed insurance have been particularly remarkable in India.
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