Table 2 Measurement requirements and... | Emerald Publishing

Table 2

Measurement requirements and supply chain sustainability value across insurance approaches

Performance dimension	Traditional indemnity insurance measurement needs	Index-based insurance measurement needs	Potential supply chain sustainability value
Financial	Farm-level loss verification Physical damage assessment Claims adjudication processes Individual payout calculation	Automated weather/index data collection Transparent threshold monitoring Predetermined payout structures Regional risk pooling metrics	Reduced information asymmetry between supply chain partners Enhanced financial planning through transparent triggers Faster capital injection reduces supply disruptions
Operational	On-site inspections Yield verification against baselines Practice compliance audits Retrospective loss documentation	Satellite and weather station data Remote sensing integration Real-time index tracking Automated activation systems	Lower administrative burden enables adaptation investment Proactive rather than reactive response Operational continuity visibility across supply chain tiers
Behavioural	Moral hazard monitoring Adverse selection screening Practice compliance enforcement Individual farm verification	Aggregate indices minimize moral hazard Practice disclosure for premium adjustment Transparent risk-sharing structures Incentive alignment mechanisms	Measurable links between sustainable practices and premiums Trust-building through transparency Incentive-based sustainability product design
Supply chain	Isolated farm impact assessment Limited cross-tier visibility Individual stakeholder focus Reactive disruption measurement	Regional/systemic risk indicators Network-level exposure tracking Multi-tier stability metrics Predictive resilience assessment	Upstream supplier stability measurement (e.g., credit access) Downstream supply certainty metrics (e.g., contract reliability) System-level resilience tracking enables coordination

Performance dimension	Traditional indemnity insurance measurement needs	Index-based insurance measurement needs	Potential supply chain sustainability value
Financial	Farm-level loss verification Physical damage assessment Claims adjudication processes Individual payout calculation	Automated weather/index data collection Transparent threshold monitoring Predetermined payout structures Regional risk pooling metrics	Reduced information asymmetry between supply chain partners Enhanced financial planning through transparent triggers Faster capital injection reduces supply disruptions
Operational	On-site inspections Yield verification against baselines Practice compliance audits Retrospective loss documentation	Satellite and weather station data Remote sensing integration Real-time index tracking Automated activation systems	Lower administrative burden enables adaptation investment Proactive rather than reactive response Operational continuity visibility across supply chain tiers
Behavioural	Moral hazard monitoring Adverse selection screening Practice compliance enforcement Individual farm verification	Aggregate indices minimize moral hazard Practice disclosure for premium adjustment Transparent risk-sharing structures Incentive alignment mechanisms	Measurable links between sustainable practices and premiums Trust-building through transparency Incentive-based sustainability product design
Supply chain	Isolated farm impact assessment Limited cross-tier visibility Individual stakeholder focus Reactive disruption measurement	Regional/systemic risk indicators Network-level exposure tracking Multi-tier stability metrics Predictive resilience assessment	Upstream supplier stability measurement (e.g., credit access) Downstream supply certainty metrics (e.g., contract reliability) System-level resilience tracking enables coordination

Source(s): Authors’ own work