As consumers, we rely on a sometimes bewildering array of certifications and quality assurance standards from fair trade to organic, from ethical fashion to sustainable timber. We want to be sure that we’re getting value for money and a certain level of quality.
Yet when it comes to complex, technically sophisticated and intangible products like index insurance, evaluating quality is a much tougher call. In some cases, consumers simply don’t know what they are buying, whether it represents value for money or has passed any kind of quality threshold. Faced with this challenge, the recent MiN Expert Forum Do no harm: the argument for quality standards and certification of index-based insurance explored how product certification could help scale up inclusive insurance in emerging markets.
“Low quality insurance can make smallholder farmers on average worse off than if they had no insurance at all,” Tara Chiu, Associate Director at the Feed the Future Innovation Lab for Markets, Risk and Resilience, told members. “There is no real way for farmers to tell the difference between a contract that offers real value from one that doesn’t. They are disadvantaged because they don’t have the information they need to decide if a product will be good for them.”
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