Malawi’s Experience with Weather Index Insurance as Agricultural Risk Mitigation Strategy Against Extreme Drought Events 1

Abstract

Malawi continues to face unprecedented challenges imposed by extreme weather events—drought in particular. Because the economy is heavily dependent on climatesensitive agriculture, Malawi is highly vulnerable to extreme drought events. Faced with a growing number of extreme drought events, the government of Malawi is determined to implement weather index insurance as part and parcel of its nationwide disaster risk mitigation strategy. This study seeks to interrogate and highlight the obstacles that have hampered successful implementation and development of weather index insurance in Malawi beyond the pilot phase. The study draws on a few examples to demonstrate other countries’ successful experience with weather index insurance as a drought risk mitigation tool. The study concludes by highlighting important lessons that could help the government of Malawi to re-think the next phase of development of weather index insurance program as an effective risk protection strategy against extreme drought events.