Microinsurance Innovation Facility Briefing Note: Weather insured savings accounts

This paper uses a laboratory experiment in Gujarat, India to assess consumers' relative valuations of savings versus insurance when planning for risky rainfall. This is done in an attempt to measure potential demand for a new type of financial product that combines savings and rainfall insurance, a Weather Insured Savings Account (WISA). Experiments reveal that many participants prefer pure insurance or pure savings to any mixture of the two, and that this preference is most pronounced among those who are more risk-averse. The results suggest that the introduction of a WISA is unlikely to be successful and mixed saving, insurance products require further investigation.