![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHd8eRpFHBw2EALg-K4IJokYsgxNiZq-DknLrpk2SfX4yIJW7saZ10mo1Ee3iL6Hgu1DyCmldTyggaHefPv4rByxkCN5JwocPhqrwRsGVRxpKYIo230yzAknC52UTNhpuKOc_-VBZ2SQ52/s1600/800px-US_Navy_071120-M-8966H-005_An_aerial_view_over_southern_Bangladesh_reveals_extensive_flooding_as_a_result_of_Cyclone_Sidr.jpg)
“This [insurance] product is index-based and operates at the meso-level, which means that payout is triggered on the basis of a certain threshold being reached resulting in immediate payout without the long process of surveying and then payout,” he explained, referring to traditional insurance schemes that rely on time-consuming damage assessment surveys to determine compensation.
According to a 2012 article in the journal Applied Economic Perspectives and Policy, “index insurance indemnifies the insured based on the observed value of a specified `index’ or some other closely related variable… [and] the most widely used index in index insurance contract designs is rainfall.”
A 2013 scoping report by the Malaysia-based research organization World Fish and a consortium of environment and agricultural agencies argued: “With current and anticipated increases in magnitude of extreme weather events and a declining consistency in weather patterns…there has been a growing interest in weather index-based insurance schemes in Bangladesh.”
Norul Amin, economic and private sector coordinator at Oxfam-Bangladesh, told IRIN: “There is strong demand for financial disaster recovery mechanisms, not only among the poor communities, but also insurance sector, donor agencies, micro-finance institutes and government officials.”...
In 2007, an aerial view over southern Bangladesh reveals extensive flooding as a result of Cyclone Sidr. US Marine Corps photo by Staff Sgt. Julius Hawkins (RELEASED)
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