Tuesday, May 10, 2011

Rain Insurance

The NYTimes (gated) profiles a brilliant micro-insurance enterprise in Kenya. By linking payouts of farmers' insurance policies directly to measured local rainfall, the company avoids most of the costs of writing and enforcing an insurance policy.

The technology to measure rainfall in many locations cheaply and to transfer money almost freely to mobile phone accounts makes this possible: 21st-century technology created for the rich 20 years ago is now an integral part of life for those living on less than $2 a day. Three cheers for globalization!

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