family in rural Tanzania

How QUIIC Works

For the past decade, agricultural index insurance had struggled to achieve its transformative potential to protect rural families from climate-related threats to their livelihoods. Quality Index Insurance Certification (QUIIC), developed by the University of California, Davis and Kenya-based Regional Center for Mapping of Resources for Development (RCMRD) with support from USAID, certifies that an index insurance product will at a minimum not leave a family worse off.

Agricultural Index Insurance and Basis Risk

Basis risk in index insurance is the term we use for the difference between an insurance index’s estimate of an individual farmer’s losses a farmer’s actual losses. Because of basis risk, an individual farmer who has losses may not receive an insurance payout. Basis risk also means that farmers who have had no losses do receive payouts. In either case, the index has failed.

With historical index and household data, QUIIC analysts use the latest statistical and economic tools to measure an index insurance product’s basis risk as one factor for index insurance quality. Other factors for index insurance quality include the price of premiums, the size of the area in the index and the conditions of when a contract fails.

Quality certification for index insurance is critical because farmers, donors and national governments can’t tell whether an index insurance product is likely to pay for losses as promised. While index insurance always carries the risk it will fail to pay out accurately, the likelihood a product will fail and when it fails both can have an enormous impact on a family’s present and future wellbeing. More broadly, low-quality insurance products waste finite development resources and undermines take-up for future high-quality products.

QUIIC pairs insurance index and household data with groundbreaking statistical and economic quality measurement tools to estimate both the like likelihood an insurance product will fail and whether it will fail when families are most in need. Based on this analysis, the QUIIC team can certify whether a product meets a minimum level of quality by not leaving a family worse off than if they had no insurance at all.

The QUIIC team is available now to test existing and planned insurance products for eastern and southern Africa. To begin the process of getting a product certified, contact QUIIC project manager Tara Chiu at