This academic paper proposes these 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀:

• The analysis provides a framework for introducing index insurance in competition with traditional products, emphasizing demand and solvency.

• Key drivers for index insurance demand are policyholder risk aversion, compensation speed advantage over traditional products, and its pricing (loading factor).

• The proposed hybrid product effectively balances the strengths of both insurance types by applying index insurance where it is “most suitable for policyholders,” accelerating compensation, and potentially reducing premiums.

• The methodology can help insurers identify specific loss types for which index compensation is preferred, optimizing portfolio structure and claims management.

• Future work will address modeling demand for index insurance in situations where traditional indemnity‑based insurance is unavailable, requiring a “more nuanced approach to calibrate the utility function.”