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About ILRI Communications

The International Livestock Research Institute (ILRI) works to improve food security and reduce poverty in developing countries through research for better and more sustainable use of livestock. ILRI is a member of the CGIAR Consortium which works for a food-secure future.

Livestock insurance gains ground in Africa

Governments across Africa are looking to protect pastoralists from the impacts of extreme weather with livestock insurance programs. But what works?

Pastoralists live precarious lives with extreme weather, such as drought, posing a potentially fatal threat to livestock – often pastoralists’ only asset and income source. To buffer livestock keepers from these risks, insurance schemes such as the Kenya Livestock Insurance Programme (KLIP), introduced by the government in July 2014, are starting to have an impact. As a result, the World Bank and the International Livestock Research Institute (ILRI), which both helped to develop the program, have received enquiries from countries – including Mauritania, Mali, Niger, Senegal, Somalia, South Africa, Uganda, Zambia and Zimbabwe – that are looking to introduce their own livestock insurance schemes.

But, what do these countries need to bear in mind in order to develop their own sustainable livestock insurance scheme?

Read the full article in Spore Magazine

IBLI introduces ‘asset protection’ product to its Ethiopia partners

The Index-Based Livestock Insurance (IBLI) provides innovative insurance solutions to help livestock keepers cope with drought-related livestock losses in East Africa. The IBLI-Ethiopia project is designed and implemented by Oromia Insurance Co., ILRI, and Cornell University. IBLI recently underwent a shift from an ‘Asset Replacement’ to an ‘Asset Protection’ Contract, as the program scaled up to areas without sufficient livestock mortality data to estimate a statistical response function.

IBLI asset protection product training for Ethiopia partners

From 15-17 July, a 3-day training workshop was organized in Addis Ababa by IBLI, Cornell university, USAID, Australian Aid and other partners with the following objectives:

  • Capacitate its Ethiopia partners, Oromia Insurance Company’s (OIC) Micro insurance Department on IBLI’s new product – ‘Asset Protection’;
  • Introduce ‘Asset Protection’ Contract to insurance companies who have interest on Livestock/Index Insurance;
  • Increase awareness of the IBLI project.

The training was given by Andrew Mude, Brenda Wandera, Wako Gobo and Masresha Taye.

This training aimed to help the insurance companies understand how the contract works so they can lead in the capacity development aspects for this product.

“We’ve been the one doing it at ILRI, training their sales agents and their partners, but a lot of the times the product has been perceived at an ILRI product so now we are building their capacity so that they will be the ones training their product. And the agents and communities can now start to see this as a commercial product for which they should pay for” said Brenda Wandera—Market and Capacity Development Manager in the IBLI project.

Masresha Taye—IBLI-Ethiopia Program Coordinator explained that “this is training of trainers, mainly for partners working with IBLI in the Borena region, Ethiopia. Aiming to address two birds in one stone, we have also invited two bid insurance companies who have been working with us in designing ‘asset protection’ contract.”

The outcome of this training is to have trained and knowledgeable people within the insurance company and to have the ‘Asset Protection’ product start to take more of a commercial angle than the research angle it has been taking before.

Story by Liya Dejene

IBLI insurance breathes new life into pastoralism in Ethiopia

In developing countries like Ethiopia, crop and livestock insurance in harsh climates is usually unavailable to small-scale farmers and herders. For insurance companies to examine loss claims among many small, widely dispersed and remote farms and herding communities makes their transaction costs prohibitively high. As a result, farmers and pastoralists are left without insurance, vulnerable to the whims of the weather.

But innovations in science and technology are changing this. Through collaboration among the International Livestock Research Institute (ILRI), Cornell University, donor agencies such as the United States Agency for International Development (USAID), insurance companies, local radio stations, and pastoralists themselves, a new insurance system is being tested in Ethiopia—and this one works with the weather. ILRI’s Index-Based Livestock Insurance (IBLI) project in Ethiopia is funded by USAID and two CGIAR Research Programs: on Climate Change, Agriculture and Food Security (CCAFS) and on Dryland Systems.

Read the full story from CCAFS

Read IBLI case study in this CCAFS report: Scaling up index insurance for smallholder farmers: Recent evidence and insights

IBLI and Oromia Insurance Company introduce insurance scheme for pastoralists in Southern Ethiopia

Oromia Insurance Company has introduced a new service using satellite data to insure pastoralists in Southern Ethiopia by using Index Based Livestock Insurance (IBLI).

According to OIC, for the first time, the insurance company has paid more than half a million birr to Borana pastoralists insured by IBLI.

OIC, one of the private insurance companies in Ethiopia, embarked upon the IBLI in August 2012 and has been underwriting this product in ten pastoral woredas of the Borana Zone, Oromia Regional State.

According to a statement OIC sent to The Reporter, in 2014, OIC sold 1,138 policies covering 2,563 head of livestock and it gives the insurance cover for cattle, camel and shoats (sheep and goat) for ETB 6,000, 10,000 and 800, respectively.

Read the full story

Africa’s first ‘Islamic-compliant’ livestock insurance pays herders in Kenya for drought-related livestock losses

ILRI news

1-Kenya A boy and a woman struggle with the dusty wind looking for water in Wajir, Kenya (photo on Flickr by Jervis Sundays, Kenya Red Cross Society).

Today, for the first time in Africa, an insurance policy that combines an Islamic-compliant financial instrument with innovative use of satellite imagery is compensating Muslim pastoralists for drought-induced losses suffered in Kenya’s northeastern Wajir County, where livestock are valued at Ksh46 billion (USD550 million).

Thirty women and 71 men in arid and semi-arid Wajir are the first beneficiaries of livestock insurance that conforms to the Islamic concept of takaful, in which risks are shared among a group of participants. Through a contract called tabbaru (donation), participants make contributions to a risk fund. In the case of a payout, which happened today, the fund makes payments commensurate with the contributions received.

The pilot program is paying approximately Ksh500,000 (USD5,800) for losses suffered to their herds…

View original post 1,235 more words

Overview

Since 2011, ILRI and its partners in the public, private and non-profit sectors have pursued a comprehensive research agenda aimed at designing, developing and implementing market mediated index-based insurance to protect livestock keepers from drought related asset losses, particularly those in the drought prone Arid and Semi-Arid Lands (ASALs). For pastoralists whose livelihoods rely solely or partly on livestock, the resulting high livestock mortality rate has devastating effects on asset levels, rendering them among the most vulnerable populations in Kenya and Ethiopia.

Index-based insurance represents an exciting innovation that could allow vulnerable rural smallholder farmers and livestock keepers to benefit from insurance and thus reduce climate-related risk. Because index insurance is based on the realization of an outcome that cannot be influenced by insurers or policy holders (such as the amount and distribution of rainfall over a season), it has a relatively simple and transparent structure. This makes such products easier to administer and consequently more cost-effective to develop and trade. Indeed the success of several pilot programs in India and various countries in Africa and Latin America has proven the feasibility and affordability of such products.

The initial pilot phase of the project, which included extensive field work and stakeholder consultation, was successful and is now complete. The research generated useful insights that have been used in the design of index-based livestock insurance (IBLI) products better targeted to the needs of pastoralists, the target clientele. An IBLI contract has been modelled, priced, tested, and sold. In October 2011, UAP Insurance Companyvand partners disbursed indemnity payments to policyholders in all five divisions of Marsabit District of Kenya, the first payouts since the launch of the pilot in January 2010. Drought triggered another payout in two divisions in March 2012. In July of 2012, IBLI was launched in the Borana zone of southern Ethiopia.

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