Achieving Success in Weather Insurance: A Value Network Analysis Approach

Value Network Analysis (VNA) is a commonly used tool within the business community, allowing an assessment of how tangible and intangible assets flow through complex human-centric systems (Allee, 2009). Here we suggest that VNA could also be a valuable tool within the field of weather-based "index insurance". It provides a complementary approach to existing economic analysis, through examining how and why different actors choose to become involved in an insurance programme, moving beyond economic benefit as the only motivation to act. VNA also assesses what competing definitions of success mean for insurance design, as the espoused purpose of a network is often different to the one revealed by its activities. Finally, the approach captures potential champions, gatekeepers and the informal value flows that so often shape project design.

We suggest that mapping climate insurance in this way allows a more nuanced assessment of why different insurance programmes grow into very different systems, despite the fact that they often use a common index design to cover a common weather peril. We also conclude that VNA might be useful more generally within Climate Risk Management, as a tool to assess programme success by balancing what each actor hopes to gain, provide directions for programmatic impact and allow more targeted funding by investors and donors.