## 1 Introduction
\begin{table}
\begin{tabular}{p{113.8 pt} p{113.8 pt} p{113.8 pt}} \hline \hline
**Dimensions** & **Advantages** & **Disadvantages** \\ \hline \multirow{4}{*}{Indemnities} & It indemnifies policyholders based on the observable value of a specific “index” or some other variable closely related to losses. & Requires research to design accurate thresholds and index selection [20]. \\ \cline{2-3}  & & Basis risk can grow if (1) the index is not correlated with loss, (2) the crop \\ \cline{2-3} Insurance components & Adverse selection and moral hazards are minimized [21]. & & production is far from the data collection, or (3) the statistical method is not adequate to model the loss [20] \\ \hline \multirow{2}{*}{Costs and implementation} & Index insurance exhibits lower transaction costs than conventional insurance [21] & Offers less reflective individual risk protection [21,22]. \\ \cline{2-3} Nature and product knowledge & Payments are made in due time [23]. & Lack of product awareness [24] and an enabling environment for the time of insurance [25]. \\ \hline \multirow{4}{*}{Scalability} & A generalized need for insurance expansion as climate change poses risks to worldwide crop production [20]. & Scalability can be achieved if insurance products are profitable for insurers. It also implies massive investments in infrastructure and delivery channels [24]. \\ \cline{2-3}  & & \\ \hline \hline \end{tabular}
\end{table} 
Table 1: Summary of advantages and disadvantages of index insurance. Sources: [PERSON] et al. [20], [PERSON] et al. [21], [PERSON] et al. [22], [PERSON] et al. [23], [PERSON] [24], and the World Bank [25]. Although the insurance index started to be mentioned in the land regime law in 1944, it was not until the crisis caused by the La Nina phenomenon in 1992 that interest was renewed. As a result, Law 69 was approved in 1993, establishing the regulations for agricultural insurance in the country. This law regulates the entities that can be insurers, which can be public, private, or mixed, but must be under the supervision of the financial superintendence [29]. The agricultural insurance market has existed in Colombia since 1998. In 1998, the first program was designed for banana crops, which based its indemnity on verifiable losses. Seven years later, two companies launched the first index insurance program for corn and cotton crops, but the results were poor and fueled producer distrust [10; 29]. The main problem with this program was that farmers could choose between different thresholds that triggered indemnity and the premium price varied depending on the trigger level selected [18]. Farmers tended to choose the cheapest premium, which resulted in lower coverage. In practice, when crops suffered damage due to rainfall, the insurance did not activate, so no payment was generated, resulting in distrust among banana producers [30]. By 2017 there was already a presence of public and private traditional insurers in Colombia, which launched programs to underwrite crops, forestry, and livestock. Among the participants are Sura, Mapfre, Seguros Bolivar, Allianz, and Liberty, and also one state insurer, La Previsora. There is also Proagro, which is a Mexican insurance company that was registered in Colombia. This company promotes a range of agricultural insurance products and services to the market [31]. In 2018, an emerging company formed by a consortium of insurers launched its first pilot program of weather-indexed insurance for coffee producers in Caldas, a Colombian department. A year later, it received premium subsidies from the government, which allowed it to cover more production costs at risk and offer its insurance to other coffee producers [32]. In 2020, this program was expanded, reaching approximately 9000 smallholders and 2200 hectares. This can be interpreted as the sustainable success of the program [33]. The insurance offered in the program covers farmers against heavy rains and floods and shortages based on the analysis of available information from weather stations and satellite data.