As proposed in this
paper, also remote sensing data can be used for index-based insurance which gives
additional advantages in comparison to traditional on-ground based indexed instruments. Furthermore, distinguishing between a promotion as well as protection level within such
schemes is beneficial from a supply as well as demand side perspective and we suggest
an approach how both can be simultaneously introduced within a remote sensing index
based insurance framework. The applicability and usefulness of the approach is tested
for smallhold farmers in North Shewa, Ethiopia.