A common issue faced at the field level while providing Weather Insurance is Basis risk. Most of ICICI's current weather stations owned and maintained by Indian Meteorology Department (IMD) are located at the district headquarters, but most of the agricultural activities are carried out in much interior locations. As a result, most of the time, ICICI was unable to measure weather data at precisely the customer location. To build up the network of weather stations in the interiors, ICICI Lombard has a tie up with National Collateral Management Services Limited for installing Automated Weather Stations (AWS) at the block level, ttese data supplement India Meteorological Department's district level weather stations and ICICI gets sub-district level data which help in better monitoring of the policies. A major advantage of these AWS is that they provide real time daily data through automated calling process. Currently, through this network 91 locations are covered to reduce basis risk (up from 64 locations in 2005).
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