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The purpose of the present paper is to review studies on weather index-insurance as a tool to manage the climate change impact risk on farmers and to explore the study gaps in the currently existing literature by using a systematic literature review.

This study analyzed and reviewed the 374 articles on weather index insurance (WII) based on a systematic literature search on Web of Science and Scopus databases by using the systematic literature review method.

WII studies shifted their focus on growing and emerging areas of climate change impact risk. The finding shows that the impact of climate change risk significantly influenced the viability of WII in terms of pricing and design of WII. Therefore, the cost of WII premium increases due to the uncertainty of climate change impact that enhances the probability of losses related to insured weather risks. However, WII has emerged as a risk management tool of climate insurance for vulnerable agrarian communities. The efficacy of WII has been significantly influenced by repetitive environmental disasters and climate change phenomena.

This study will be valuable for scholars to recognize the missing and emerging themes in WII.

This study will help the policy planners to understand the influence of climate change impact on WII viability.

This study is the original work of the author. An attempt has been made in the present study to systematically examine the viability of WII for insuring the climate change risk.

The purpose of this paper is to analyse the association between farm/farmer characteristics and unsubsidized farm insurance premium expenditure in Ireland. The distribution of farm insurance expenditures is wide, and it is important to understand the extent to which individual factors influence demand for different levels of insurance premium.

The quantile regression approach and farm accountancy data from the Teagasc National Farm Survey are used to model the association between farm/farmer characteristics and farm insurance demand in Ireland.

Asset values (livestock, buildings and machinery) are positively associated with total insurance expenditure. Both forestry area and crop area are significantly associated with farm insurance expenditure with a stronger influence on the middle and upper part of the distribution. The interaction between farm income and farmer age is positively associated with insurance expenditure pointing to the importance of farm income protection.

The research is mainly concerned with insuring against substantive risks, which are capable of threatening the asset base and continuation of the farm business. Future research can integrate questions in relation to farm safety and farmer health with research on the economic survival of the farm business.

Farmers in Ireland adopt unsubsidized farm insurance as a risk management tool. This situation is relevant to other EU member states including Belgium, Denmark, Germany and Sweden. The findings can be used to inform stakeholders and policymakers about the relative impact of different factors on insurance expenditure.

Previous research has typically focused on the linear relationship between farm/farmer characteristics and insurance demand without accounting for variability across the size distribution. This research is based on the quantile regression approach where the association between farm/farmer characteristics and farm insurance expenditure can be assessed at different points of the distribution.

Numerical literature shows that agricultural insurance can affect pesticide investments, but few of them are devoted to explain how agricultural insurance affects farmers’ selection on green or traditional pesticides. This paper aims to develop a theoretical model about how agricultural insurance influences on green pesticides selections and tests our conclusions by using the data from China land economic survey (CLES) from 2020 to 2021.

We employ probit model to capture the effects of agricultural insurance on green pesticides adoption.

We indicate that green pesticides have a stronger effect on stabilizing yield and increasing income than traditional pesticides, but there are still risks disturbing farmers’ decisions on green pesticides usage. By providing premium subsidies after the farmers are affected by natural risk, agricultural insurance improves the farmers’ expected income and encourages farmers to use green pesticides. Further, we further confirm these conclusions by considering different scenarios such as climate risks, farmers’ entrepreneurship and credit constraints. We find that the effects are more salient if croplands are under higher natural risks and, farmers are equipped with entrepreneurship and formal credit. This paper implies that the agricultural insurance decoupled with green technologies also have salient positive effects on agricultural pollution control.

The potential contributions of this paper can be outlined in three aspects in detail. Firstly, this paper aims to revel the effects of agricultural insurance on pesticide selection by structuring a general theoretical model. By using the CLES data from 2020 to 2021, we confirm that agricultural insurance increases the probability for adopting green pesticides. Secondly, this paper discusses the effects of farmers’ characteristics on the results and finds that if farmers have entrepreneurship, the effects of agricultural insurance on green pesticide usage will be more salient. Thirdly, it uncovers some practices in China, which will supply experiences for other developing countries. For example, this paper further demonstrates that “insurance + credit” plan the present Chinese government carried out will be an important measure for strengthening effects of agricultural insurance on green pesticides usage. Moreover, it shows that decouple agricultural policies will also guide farmers to use green technologies eventually if the technologies are reliable and farmers can afford.

The purpose of this study is to understand how risk attitudes drive demand for different types of insurance amongst Ghanaians.

This study uses data from a nationally representative survey of Ghanaian households (Ghana Living Standards Survey Round 7). Risk aversion is measured following the approach of Holt and Laury (2002) in the use of hypothetical questions about investment. Probit regressions are used to estimate the effect of risk aversion on insurance outcomes.

The paper finds evidence that supports the theory that risk attitudes influence insurance demand. Specifically, risk aversion is positively related to the uptake of insurance in general and in particular, public health insurance. Unlike previous literature, the authors do not find the sex of the respondent to affect the relationship between risk aversion and insurance demand except for private health insurance. Socio-economic factors such as wealth, age and education were found to strongly predict insurance demand.

The findings confirm that risk attitude influence the demand for insurance in developing countries but socio-economic factors play a strong role in explaining low insurance penetration in such contexts.

Theoretically, attitudes towards risk have been strongly linked with insurance demand. Yet, empirical evidence on this relationship is limited in developing countries where insurance penetration is very low. This study is among the first to document the influence of risk attitude on the demand of a range of insurance products using a large nationally representative sample of individuals in a developing country.

The objective of writing this case study is to allow management students to engage with the complexities of mergers and acquisitions (M&As) in the insurance sector in an emerging economy like India. Upon completion of this case study, the students will be able to critically evaluate the business environment of the insurance sector of a developing economy like India, analyse the impact of M&As on the insurance industry of India, appraise the post-merger consequences and strategies to deal with these consequences, assess the applicability of market power and growth theories in the context of M&As and develop a strategic action plan for handling post-merger challenges.

On 3 September 2021, the Insurance Regulatory and Development Authority of India (IRDAI) approved the “Scheme” related to the merger of the non-life insurance division of Bharti AXA General Insurance Company Limited (“Bharti AXA”) with ICICI Lombard General Insurance Company Limited (“ICICI Lombard”). Earlier, on 21 August 2020, the boards of the companies had approved entering into definitive agreements through a scheme of arrangement. The merger received approvals from different regulatory bodies as mandated (Gandhi et al., 2023). Bhargav Dasgupta, managing director and Chief Executive Officer of ICICI Lombard, stated, “This is a landmark step in the journey of ICICI Lombard, and we are confident that this transaction would be value accretive for our shareholders” (FE Bureau, 2020). However, the merger posed a dilemma for Dasgupta and the management regarding crop insurance owing to its impact on profitability. Crop insurance historically had high claim ratios nearing 135% for ICICI Lombard for financial year 2018. The company ceased to underwrite this product from 2019 onwards (TNN, 2019). However, ICICI Lombard had to fulfil the three-year commitment made by Bharti AXA to the state governments of Maharashtra and Karnataka towards crop insurance. It was a scheme initiated by the Government of India, covering farmers against losses due to cyclonic rains, rainfall deficits and other unforeseen calamities. Dasgupta faced a challenge in managing the interests of the farmers and the company’s shareholders while balancing profitability, which had already been impacted by the COVID-19 pandemic. This case study delves into post-merger complexities in the financial sector non-life insurance industry in emerging countries like India.

This case study is suitable for undergraduate and post-graduate management students and executives from the insurance industry.

Teaching notes are available for educators only.

CSS 11: Strategy.

Despite the susceptibility of cotton crops to pest attacks in the Malwa Region of Indian Punjab, no crop insurance policy has been implemented there– not even the Pradhan Mantri Fasal Bima Yojana (PMFBY), which is a central scheme. Therefore, this paper attempts to gauge the likely impact of the PMFBY on Punjab cotton farmers and assess the changes needed for greater uptake and effectiveness of PMFBY.

The authors have conducted a primary survey to conduct this study. Initially, the authors compared the costs of cotton production with the returns in two scenarios (with and without insurance). Additionally, the authors have applied a logistic regression framework to examine the determinants of the willingness of farmers to participate in the crop insurance market.

The study finds that net returns of cotton crops are conventionally small and insufficient to cope with damages from crop failure. Yet, PMFBY will require some modifications in the premium rate and the level of indemnity for its greater uptake among Punjab cotton farmers. Additionally, using the logistic regression framework, the authors find that an increase in awareness about crop insurance and farmers' perceptions about their crop failure in the near future reduces the willingness of the farmers to participate in the crop insurance markets.

The present study looks for the viability of PMFBY in Indian Punjab for the cotton crop, which can also be extended to other crops.

Punjab could also use crop insurance to encourage diversification in agriculture. There is a need for special packages for diversified crops under any crop insurance policy. Crops susceptible to volatility due to climate-related factors should be identified and provided with a special insurance package.

There exist very scant studies that have discussed the viability of a central crop insurance scheme in the agricultural-rich state of India, i.e. Punjab. Moreover, they do not also focus on crop losses accruing due to pest and insect attacks.

Federally subsidized crop insurance aims to mitigate farm risks of crop producers. A body of literature has examined informational problems under this program. However, few studies empirically link crop insurance participation with farm financial performance. Most use county-level aggregates to argue that crop insurance participation is associated with increased farm financial debt. Using farm-level data, this study provides empirical evidence of crop insurance's effects on farm financial risk.

The impact of crop insurance on farm financial risks is assessed using farm-level data from Kansas. The sample consists of at least 1,600 farms each year from 2002 to 2015. Financial risks are measured using the probability of falling into the critical zone of five different financial ratios. The study uses two matching estimators to estimate the causal effects of crop insurance participation on farm financial risks. Several alternative empirical approaches account for unobserved heterogeneity and potential endogeneity.

Crop insurance participation has reduced the farm's likelihood of being in the critical liquidity risk by 8%. This result is robust across matching estimators and alternative specifications to account for unobserved heterogeneity and potential endogeneity.

This is one of the few studies to examine whether crop insurance reduces farm financial risks. This study provides empirical evidence of the extent to which crop insurance enrollment impacts farm financial risks. Findings suggest that crop insurance is critical to maintaining the financial well-being of crop producers, and significantly reduces the likelihood of producers being in a critical liquidity risk.

This study aims to explore the adoption of enterprise risk management (ERM) in developing and developed countries. Is there a similarity or difference between the two contrasting institutional markets and the reasons behind them?

The adoption of ERM is analyzed on the basis of the institutional framework. The author draws empirical evidence by comparing the cases of a British and an Indian insurance company using evidence from multiple sources. This paper focuses on extra-organizational pressures exerted by economic, social and political situations across two countries that influenced the adoption decision of ERM.

The findings of this research revealed that early adopters of ERM in different institutional markets face coercive and normative pressure but not mimetic pressure. The adoption of ERM in India and the UK is dissimilar. Companies in the British insurance market encounter higher institutional forces than those in the Indian market because of higher coercive and normative pressure. The aspirations to adopt ERM in the Indian and UK markets included improved strategic decision-making to maintain stakeholder expectations and higher standards of corporate governance. In the UK, ERM was adopted to reduce surprises and fluctuations under flexible regulations but with stricter adoption and to improve credit ratings.

Previous literature has discussed ERM adoption in similar markets or within one market with similar institutional pressure. In contrast, this research is a comparative study that explains the analysis of institutional theory in two different institutional environments in the adoption of ERM.

At the global level, disaster risk finance (DRF) is playing an increasingly prominent role in the international agendas for climate change adaptation. However, before implementing such agendas, it is essential to understand the needs and limitations of DRF in the subnational context where they need to impact. This research aims to gain insights into the perspectives of community and governmental actors in Colombia regarding DRF. Its goal is to promote the specific design of collaborative educational and technical assistance processes that consider their interests in the subject and the cultural diversity of the territories.

To achieve this, semi-structured interviews were conducted, and the findings were organized to highlight key aspects that help to understand DRF perspectives in the Colombian context.

It was found that the most significant limitations of implementing DRF include a lack of knowledge on the topic, corruption that encourages a reactive approach and the absence of economic resources. Concerns have emerged regarding the possibility of climate risk insurance becoming a profit-driven enterprise and the potential development of dependency behaviors within community groups, leading to maladaptation and moral hazard. Similarly, the implementation of DRF through foreign funds has raised concerns about the loss of territorial sovereignty and autonomy.

This is one of the first studies that carry out this kind of research and contributes to the formulation of inclusive public policies for DRF in different contexts worldwide.