Abstract:
The objective of this study is to support the making of a more efficient and realistic pricing
policy for Index-Based Microinsurance Scheme (IBMS) by analyzing, using the contingent
valuation method, the insurance demands (i.e. willingness to pay) of the paddy farmers in Sri
Lanka. The results show that farmer‟s demand is substantially high and determinants are highly
location specific; hence indicating a potential discriminating and flexible policy in the insurance
scheme. It means that insurance policy concerning crop insurance product should be designed
and implemented with synergies of different approach in micro-insurance rather than a uniform
structure.
