Droughts are silent killers, with the potential to cause enormous losses to society as a whole and to the insurance industry. Many loss-bringers are unseen, and the result of secondary events. This makes it difficult to assess the losses involved. Insurance against drought is particularly important in the agricultural sector, but in practice only feasible with governmental involvement. Some crop insurance schemes have proven quite successful and have gained importance in recent years, both in developed and developing countries. As drought is not only a consequence of unusual weather conditions, but also subject to the way in which water resources are managed, overall awareness is a key factor in being prepared to cope with the resulting risk, and in avoiding catastrophic consequences.

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