The creation of index insurance requires significant prior research and extensive data that may not be available or sufficient in lower- income countries, including identifying the most appropriate farm and climate variables to include and financial and regulatory support from the public sector . Some insurance providers bundle it with other services, such as fertilizer use or seeds that may not be useful to particular farmers and can increase their overall capital costs . Although proponents see IBAI as a way to mitigate farmers' risks associated with more variable weather patterns , critics argue that derivative- based insurance products tend to benefit wealthier farmers and fail in assisting the poorest and most marginalised farmers . Thus far, there is low agreement and medium evidence regarding the adaptation potential of derivatives-based insurance products, signalling a need for further research in this area.
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report