Events
Grill the Expert: Charles Stutley
Date: Tuesday 16th June, 2026
Time: 7:00AM EDT | 12:00PM BST
Page Contents
About the Session
Planning—or already setting up—agricultural insurance in your country? Join us for a candid conversation with Charles Stutley on the policy choices, trade-offs, and implementation challenges he has faced—and that you may encounter in your own reforms. This is not a traditional webinar. We’ll ask the tough questions, and Charles will share practical answers. Bring your questions or simply listen in as we surface real-world insights on what works (and doesn’t) in agricultural insurance.
Please note that the session was conducted in English.
If you joined us live, we’d love your feedback: Feedback Survey
About the Expert
Charles Stutley is an agricultural insurance and reinsurance specialist with 35 years of experience designing and implementing risk solutions globally. He specializes in public-private partnerships and insurance for smallholder farmers in emerging economies.
Formerly a Director at ARM Limited and a senior reinsurance underwriter at PartnerRe, he has spent the last 20 years as an independent consultant for international development agencies, supporting agricultural insurance programs in over 50 countries across Africa, Asia, and Latin America.
Resources
Recording
We would love to hear your feedback: Feedback Survey
Jump to a section/question:
- 00:00 Welcome and Housekeeping
- 03:32 Introduction of Expert: Charles Stutley
- 04:30 Tell us how you got into agricultural insurance
- 07:55 Can you share one great story with us?
- 15:11 What is agricultural insurance in emerging markets?
- 21:35 Index vs indemnity insurance
- 30:14 Premium subsidies, are they the way to go?
- 35:58 What are the three questions governments need to ask themselves when wanting to implement an agricultural insurance program?
- 39:52 Audience question: What would be your top three lessons that can be used now for index insurance?
- 44:02 Audience question: What is a case study you would suggest we look at and learn from?
- 49:40 Audience question: There seems to be a trend of decreasing government subsidies – what are some financing alternatives and/or changes in product design that can mitigate this issue?
- 52:55 What is one last message you want to give our audience on the topic?
Post event Q&A
These were the questions posed by the audience that we didn't have time to answer during the event, they are organised by topic.
General questions
How are vulnerable populations impacted by disaster risks?
Vulnerable poor rural and farming populations are always most exposed to natural disasters. Typically, vulnerable farming populations grow crops for food to meet family consumption needs, and they have little or no surplus production to sell to generate savings and buffers in the time of natural disasters which hit their growing crops. They also typically have very poor access to credit in times of financial need. In the event of a natural disaster which leads to significant damage and loss to their growing crops or livestock enterprises these vulnerable families resort to reducing their consumption, taking their children out of school, and then they commence on an asset depletion path selling their productive assets such as animals for ploughing or transport. Often these families will resort to taking out loans from local money-lenders often at very high rates of interest. The results are often that after a natural disaster these vulnerable households sink further into debt and poverty. This is why DRFI instruments which provide livelihoods protection are so important for these vulnerable HHs.
What is the strategy in a country with the agricultural sector dominated by poor, very smallholders with floods and droughts?
As a starting point every government needs to develop a natural disaster risk management plan and strategy for major sectors e.g. (i) Public infrastructure and assets, (ii) private homeowners, (iii) rural/agricultural sector which in the case of the very poor smallholder farmers clearly defines and quantifies:Their location(s), the frequency and severity of the flood and droughts;
Risk prevention and mitigation measures that can be adopted by the farmers and local government – e.g. flood control measures, drought resistant crop varieties?
The value of expected losses due to flood and drought 1 in 5, 10, 50, 100, 250 years (through a risk assessment/risk modelling study)
To put in place a layered disaster risk financing program starting with farmers risk retention through savings and credit and on-farm risk management practices and which might include a layer which would be funded under a national disaster relief scheme, through to consideration of the role of crop and livestock insurance backed by reinsurance for the catastrophe layers.
How have you seen the sector change from when you started today?
35 years ago there was very little smallholder agricultural insurance available, especially in Africa where only 6 countries had any form of agri-insurance including most notably South Africa, which had over 100 years of private (mutual) sector crop hail for the large-scale commercial farming population, but nothing for smallholder farmers, and Morocco. 35 years ago most LIC governments had not heard of agricultural insurance and did not have a comprehensive DRFI strategy in place – rather they mainly depended on international humanitarian and food aid assistance. There were no commercial weather index-based agricultural insurance programs and one LIC - India - had embarked on area yield index insurance (AYII). Similarly, with the exception of FAO, none of the mainstream international development banks or agencies had climate risk insurance or agricultural insurance on their agendas. Furthermore, there were very few agricultural risk management and insurance consultancy companies involved in the design of such products and programs and provision of field services. Finally, there were very few insurance companies in LICs with any knowledge or expertise in agricultural insurance and only a handful of specialist agricultural reinsurers. The landscape has totally changed today in 2026: governments and donors and development agencies across the globe, in response to climate change, are investing hugely in national DRFI strategies in LICs and MICs including in agricultural insurance and the financing of premium subsidies; more than 25 African countries have PPP agricultural insurance schemes targeted at smallholder farmers; index insurance is constantly updating and innovating and offering new and more cost-effective- to administer index insurance solutions, agri-insu-tech companies are crowing into this space, many more local insurers are developing their own capacity and expertise to design, rate and implement agricultural insurance etc. Farmer premium subsidies are no longer a dirty word in development circles. While there is still major room for improvement, tens of millions of smallholder farmers in Asia and LAC and Africa have access to agri insurance today.
How can an agricultural insurance market in LICs be private sector driven? Low purchasing power, high climate change risks.
There are very few examples, if any, of purely private sector agricultural insurance markets in LICs. Rather, we have seen a significant shift in the past 25 to 30 years, away from national public sector insurance company’s, which have sole responsibility for issuing government subsidized agricultural insurance to public-private markets (examples include Anagsa in Mexico which was replaced by Agroasemex in 1990 and private insurers; COSESP in Brazil, AIC India which is now a open market with about 20 public and private insurers under the PMFBY, China and Philippines…). PCIC in the Philippines is the only public sector monopoly agri-insurer that exists today. The major public sector agri-insurance programs acted like monopolies, they crowded out the private sector, they were very inefficient, they were usually underpriced (i.e. not actuarially rated) given governments desire for cheap insurance for small sub-subsistence farmers, and they mostly incurred major claims and underwriting losses.. and were subsequently closed and replaced by public-private partnerships where the private sector was given a clear mandate to design and rate and market and underwrite and adjust claims and government would provide support through measures such as creating a suitable legal and regulatory environment, data strengthening, farmer awareness, farmer premium subsidies and support for reinsurance.
For relevant literature on these failed public sector programs and the growth of public private partnership models see:Hazell, P., C. Pomareda and A. Valdes 1986. Crop Insurance for Agricultural Development, The Johns Hopkins University Press
Mahul, O., and C. Stutley 2010. Government Support to Agricultural Insurance: Challenges and Options for Developing countries.
How can we ensure that farmers know that they have embedded insurance?
It is essential to have transparency. Whether insurance is bundled or embedded with credit or government subsidized input supply programs, it is essential that the banks/financial institutions and input dealers carefully explain the embedded insurance cover and issue the insured farmer with an insurance certificate summarizing the basis and amount of cover and how the index triggers and how they will be paid.
How willing are governments to create or pay for consumer awareness?
Most governments are very reluctant to pay for consumer insurance awareness, but this also applies to most private insurance companies – neither entities have the budgets to finance financial and insurance literacy campaigns for smallholder farmers scattered in remote rural locations. Some exceptions: in Kenya, the Insurance Regulatory Authority (IRA) as part of its remit implemented several farmer awareness campaigns to explain the role of agri-insurance and the specific features of the KLIP NDVI Index and KAIP AYII Product. In India, central government is now funding specific PMFBY farmer awareness and education programs in order to increase farmers’ trust and understanding in crop insurance.
How do governments go about data strengthening - often a binding constraint?
This is a huge question to try to address. In Kenya with the launch of World Bank Designed Kenya Livestock Insurance Program (KLIP in 2015) and the Kenya Agricultural Insurance Program (KAIP in 2017) government supported the strengthening of livestock data information systems and beefed up the seasonal collection of crop sown and harvested area, production and yield data and invested in Crop Cutting Experiments. In India GOI is investing hundreds of millions in strengthening and digitizing data systems with use of drones, remote sensing, and yield forecasting technology and investment in weather stations (WIND project). I guess the key is, right at the start of a new PPP for agricultural insurance, to get government agreement to fund specific areas of data strengthening because of the benefits across many sectors and not just insurance.
How can data become public good?
Weather data, crop production and yield data, damage and loss data and agricultural price data are conventionally collected and maintained by governments in LICs. However, the private sector can and does play a major part in collecting such data and this applies to many agricultural insurance programs where the private sector funds weather stations and collects huge amounts of satellite weather data, through implementing CCEs for yield estimation purposes. Wherever possible, both public and private sector data should be made freely available to users including insurance companies.
Index Insurance
I have been involved with index insurance since 2005, and involved in the first product in India, and working on a global stage for last 17 years. I am keen to hear what would be your top three lessons that can be used now for index insurance? (Also answered during event)
ICICI Lombard was the first private sector insurer in India to successfully design and implement weather index insurance in India and I am sure I could learn many lessons from you about the top three lessons that can be used now for index insurance. Some of the keys include: (i) talk to farmers first about the specific crop and range of insured perils you wish to design the index for (ii) ensure that the risks are significant and can lead to major losses and most importantly that they be indexed…. It's no good to say you will design a cover to protect against stemborer damage in maize as this cannot be indexed; (iii) the simplest indices are usually the best and which insure a small number of key perils; (iv) unless you can establish a strong correlation between the proxy variable of your index (e.g. rainfall deficit) and crop yield (say for maize) shortfall, don’t consider designing and selling the maize rainfall-deficit index to farmers; (v) try to design an index which costs less than 10% but which provides meaningful protection to the farmer; (vi) always be aware of the potential for BASIS risk and in the design and testing of the product seek ways to minimize basis risk; (viii) closely monitor and evaluate the performance of the index product and seek to improve it over time; and (ix) ensure you invest in farmer awareness and understanding of the nature of the index product and explain carefully the potential for basis risk.
What is your view on a full regulation on Index Based Insurance up-front of any product/program launched?
I believe Insurance Regulators can play a critical role in regulating and approving any new index-based insurance product or program before this is launched into the market. This is the basis of consumer protection. Some participants may be familiar with the QUIIC (Quality Index Insurance Certification) is a USAID-supported initiative launched in 2020 by UC Davis economist Michael Carter. It aims to independently certify index insurance products in Africa to ensure they offer smallholder farmers genuine financial protection against climate and weather shocks – see
https://www.preventionweb.net/news/certifying-index-insurance-quality-meet-financial-challenges-climate-change-africa
Premium subsidies
How to make agriculture insurance affordable and relevant to smallholders? Government subsidies to insurers?
Yes, one of the main options for governments to make agriculture insurance affordable and accessible to small farmers is through SMART Farmer Premium Subsidies. For a review of the literature on smart premium subsidies see:Hill, R., Gajate-Garrido, G., Phily, C. & Dalal, A., 2014. Using Subsidies for Inclusive Insurance: Lessons from Agriculture and Health, s.l.: ILO
Bertram, V. & Scott, Z., 2024. Rethinking premium support: enhancing the impact and sustainability of climate risk insurance, s.l.: Centre for Disaster Protection. InsuResilience Solutions Fund, Undated. Principles and conditions on premium support for climate and disaster risk insurance under Pillar III. [Online]
Available at:
https://insuresilience-solutions-fund.org/wp-content/uploads/2025/04/2024-05-ISF-Principles-and-Conditions-on-Premium-Subsidies_Pillar-III.pdfMCII, 2016. Making climate risk insurance work for the most vulnerable: Seven guiding principles, s.l.: s.n.
Töpper, J. & Daniel Stadtmüller, I. S., 2022. Policy Note: Smart Premium and Capital Support. Enhancing Climate and Disaster Risk Finance Effectiveness Through Greater Affordability and Sustainability, s.l.: s.n.
Hazel et al 2017. When and How should agricultural insurance be subsidized: Issues and Good Practice.
https://documents1.worldbank.org/curated/en/330501498850168402/pdf/When-and-How-Should-Agricultural-Insurance-be-Subsidized-Issues-and-Good-Practices.pdf
How can low- and middle-income countries finance agricultural insurance subsidies given limited fiscal space?
By choosing SMART premium financing principles governments keep the fiscal costs to manageable levels, e.g. Rwanda where government finances farmer premium subsidies of 40% and in Uganda where smallholders receive 50% premium subsidies and medium/large farmers 30%. Contrast this with the Philippines where nearly all farmers receive free 100% subsidized agri-insurance, India where the average premium subsidy level is over 80% and some states even provide universal coverage or free insurance. China, Indonesia and Thailand also offer extremely high premium subsidy levels.
Why would you want to give premium subsidies to the private sector? Private sector is driven by profit, while government serves people.
There is a common misconception that when government funds agricultural premium subsidies which are transferred to a private insurance company(ies) that government is “giving away public funds to the private insurer(s), thereby providing them with profits." This is incorrect. These are “Farmer premium subsidies” designed to make agricultural insurance more affordable and therefore accessible to farmers. The premium subsidy is paid by government to the insurer along with the farmers share of premium: for example if the actuarially determined commercial premium rate if 7.5% and there is a 50% farmer premium subsidy paid by government, then at the time of purchasing insurance the farmer only pays his/her 3.75% share and the insurer claims back the other 3.25% share from government usually against submission of a premium bordereau providing proof of each bound risk, the name and location of the insured farmer, the insured crop and area, the sum insured, the premium rate and full premium due, the premium subsidy level and the amount of share of premium actually paid by the farmer and the farmer premium subsidy share which will be paid by government the insurer.
The commercial premium is comprised of: (i) the pure risk premium (also termed the pure loss cost rate) or the average amount that is expected to be paid back to the farmer as claims payments plus loadings for (ii)data risk and uncertainty and (iii) catastrophe loss years, plus (iv) acquisition costs and the insurer’s own administration and operating costs, (v) the reinsurer’s expenses and finally a profit margin, or return on equity which might be in the order of 1% of the 10% premium rate in this example. Arguably when a government pays the 50% premium subsidy, it is also contributing to a very small amount or 0.5% of the expected profit. However, agricultural insurance is one of the most exposed to catastrophe risk classes of insurance: private insurers take on huge amount financial risk (liability) and very few insurers make large profits over time. There is one country in the world, namely the USA (Federal Crop Insurance Program - FCIP), where farmer premium subsidies are only paid on the pure risk premium – termer the “producer premium”… and government pays separate subsidies equivalent to about 18% of the full premium to cover their acquisition and admin and operating costs and then an additional subsidy on the costs of loss adjustment (for further details see https://rma.usda.gov).
There seems to be a trend of decreasing incentives from government when issuing subsidies, given the recent few years is rather benign when it comes to agriculture insurance performance. What are some alternatives for financing or change in product design that can mitigate this issue?
We briefly discussed this issue during the session. We are increasingly seeing that donors, development banks, NGOs and philanthropic organisations are assisting governments by co-financing premiums on sovereign disaster risk programs such as CCRIF or ARC through to micro-level agricultural insurance programs. Where governments are providing premium subsidies of 75% up to 100% these are arguably unnecessary and unsustainable and government should clearly state that over xx years they plan to gradually reduce the premium subsidy levels to say and average of about 50%... this would save billions of dollars in countries like the USA, China and India.
Is there real hope that agriculture insurance will become a self-sustaining long-term line of business for insurers? (w/o subsidies).
The USA has been providing subsidized multi-peril crop insurance (MPCI) for nearly 100 years; Spain (Agroseguro) has operated subsidized agri-insurance since 1980, as has India and the Philippines - for more than 40 years. The farm lobby is very strong in all these countries, and I cannot see government being able to withdraw the farmer premium subsidies without causing political uproar… although there is scope in USA, India and Philippines to reduce the levels of premium subsidies over time.
Turning to the private insurance (and reinsurance) sector, crop hail + insurance has been widely available for more than 100 years in Europe, USA, Canada, Argentina, South Africa, Australia and New Zealand – and is strongly demanded by farmers, although it carries zero farmer premium subsidies. Crop-hail business is self-sustaining and generally considered low risk business if the insurer has a good spread of risk - profit margins are generally low for crop hail business. Average premium rates for hail + and between 2.5% to 5% maximum and are easily affordable by commercial and semi commercial farmers. However, in the case of agri-insurance in the tropics, semi-arid and arid climates where the majority of smallholder vulnerable subsistence farmers live, catastrophe risks of droughts, excess rain/floods, hurricanes and pests and diseases mean that average premium rates are often between 10% to 15% or even higher on both indemnity-based MPCI/NPCI covers and Index-based WII/RS/AYII covers. Experience shows that smallholder farmers cannot afford these high premium rates without farmer premium subsidies paid by government, or other sources – donors, development agencies, NGOs and philanthropic organisations.
There may be scope over-time once smallholder farmers have gained trust and experience with crop and livestock insurance products to gradually reduce the premium subsidies – say from about 50% to 60% maximum down to about 20% to 25% without significantly reducing demand for insurance. However, I do not know of any smallholder private or PPP sector insurance programs which have achieved scale and financial sustainability in the tropics and semi arid and arid climates without any farmer premium subsidies.
Subsidies premium or subsidies cost of operations for insurers, so that insurers can reduce premiums... what are your views?
The huge majority of subsidized agricultural insurance programs subsidize the costs of the premiums paid by farmers and from a government perspective it does no harm to promote we are making crop insurance more accessible to you through farmer premium subsidies. The USA FCIP is unique in that it subsidizes both the pure risk premiums paid by farmers and separately the admin and operating costs of the insurance companies/MGAs. A farmer premium subsidy say of 50% is very up front and transparent and easily understood by all, whereas an agreement to subsidise insurers A&O costs to reduce the commercial premiums they charge the farmer many be much less transparent and subject to major variations between insurers and difficult to quantify accurately? On balance, I would recommend farmer premium subsidies.
Case studies
What great smallholders' farmers schemes would you suggest as benchmarks to consider?
Asia: India is a unique challenge of how cost-effectively to reach farmers with agricultural because of its more than 135 million smallholder farm families. Its central feature is that it adopts crop index insurance both Area Yield Index Insurance (AYII) and Weather Index Insurance (termed Reformed Weather based Crop Insurance (RWBCI). It has over 40 years of experience with implementing these products and has embarked since 2020 on a digital technology drive including a digital national crop insurance portal (NAIP) which permits farmers to register on-line, rural banks and financial institutions and other distribution channels to register and upload the insurance details of 40-50 million farmers each year and for the insurers to issue policies and certificates and premium collection through to claims payouts and settlement to individual farmers’ accounts. It is investing heavily in YESTech (RS and crop yield modelling) to supplement and eventually replace costly-in-field loss adjusting etc. Many African countries are now developing their own AYII programs and could usefully learn from the Indian experience.
Africa: Senegal and the CNAAS is one of Africa’s oldest and most innovative government subsidized agricultural insurance programs which has a PPP specialist agricultural insurance company and management team. CNAAS offers a wide range of mainly index based crop, livestock and fisheries insurance programs. The Uganda Agricultural Insurance Scheme (UAIS) is a coinsurance pool agricultural insurance program which has been operating for a decade with limited premium subsidy support from government. It is slowly achieving scale and sustainability and provides a useful institutional and operating model for other African players to study.
South America: Both Mexico and Brazil have well established and mature PPP agricultural insurance programs and are well worth studying.
Every country wanting to develop agriculture insurance started studying Agroseguro – what are the most common (if any) issues that prevent them from being successful? In one country I worked on, the largest dominant player didn’t want to join the pool, and reinsurers left the market.
Agroseguro is perhaps one of the best example of a PPP agricultural coinsurance or pool model along with TARSIM. However, it is not the only model to study and open-market competition models such as in Mexico, Brazil, India are also well worth studying. I am very sorry that in the country you worked in the dominant player did not want to join the pool – this is quite a common issue. Sometimes it may be better to start a coinsurance pool with a relatively small number of willing but smaller insurance companies and if the program is successful, larger insurers may apply to join. I do not know the reasons reinsurers left the market, but I expect it was because of poor insurance results, low uptake and lack of demand or interest by all public and private stakeholders.
PCIC has moved to the Ministry of Finance, will other private sector companies also be able to access the subsidy in the Philippines?
Two years ago, PCIC was moved back to the jurisdiction of the Department of Agriculture and it continues to receive major farmer premium subsides from government – up to 100% premium subsidies for subsistence farmers < 7 ha land. GoP and World Bank have for a number of years been working on a parallel initiative to crowd in the private sector under a separate PPP pool arrangement with PCIC which will target semi commercial farmers and SMSE’s. It is planned that the pool initiative will receive separate funding support for partial premium subsidies only.
Unanswered questions
Some questions were beyond our experts realm of expertise, this included:
Are there any good examples of the use of Insurance Linked Securities for agricultural risks?
Could you explain the usage of insurance by financial institutions as UoP (use of proceeds) in a bond.
Could you provide an overview of prevailing capital adequacy / solvency coverage requirements applicable to insurers across different classes of insured risk or asset categories? In particular, how do regulatory capital charges, reserving requirements, and risk-based capital treatment vary by line of business or underlying insured exposure? Additionally, what are the most authoritative sources for benchmarking these requirements across jurisdictions and insurance segments?
We thank everyone for their questions and engagement with this event!