IRI Report: Feasibility of Global Weather Datasets for Index Insurance

Powell, Bristol; Brahm, Manuel

The aim of this report is to explore the feasibility of freely available satellite-derived climate products to be used in index insurance projects globally. This report also describes the suitability and applicability of these products, with describing specific characteristics that affect how these products can be used in an insurance context.
1.1 Overview
In order to design index insurance, current continuous precipitation measurements as well as an extensive historical precipitation data record are needed. A limited number of rain gauge networks means that index insurance is not scalable if it only works in areas covered by existing rain gauges with long histories. To overcome this limitation, many index insurance projects around the world rely on satellite-based datasets, which have long historical records and global spatial coverage. There are many types of satellite-derived products available, each with their own strengths and weaknesses. Here we have focused on three categories: satellite rainfall estimates, merged satellite and rain gauges estimates, estimates of vegetative abundance, and soil moisture estimates. Although success with satellites has allowed index insurance programs to expand around the globe, remotely sensed data can conflict with on-the-ground observations and the products certainly cannot be applied blindly over all landscapes, thus this report aims to assess the feasibility of datasets for climate insurance products. Each of the products can provide a new piece of information about conditions on the ground. For example, a vegetation index might be able to indicate locations where a satellite rainfall estimate is (or is not) adequately capturing drought years. This document also provides direct links to resources openly available through the IRI Data Library.


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Academic Units
International Research Institute for Climate and Society
Published Here
March 13, 2024