About IBLI

A Business Evaluation of the Sales and Distribution Model for Index-Based Livestock Insurance

“Developing the insurance product was the easy part. The tweaking, monitoring, and adapting – that has been much more complicated.” This, in essence, was what Cornell development economist Christopher Barrett informed us as we began discussing our upcoming Kenya research trip with him.

He was right. Since the International Livestock Research Institute (ILRI) formulated Index-Based Livestock Insurance (IBLI) ten years ago, the product has been lauded as a strategy to prevent drought-induced livestock losses among Kenyan and Ethiopian pastoralists. By combining satellite observations of forage conditions with longitudinal livestock mortality rates, it calculates clients’ seasonal payouts.

While by and large successful – and already showing evidence of positive impacts on pastoralists’ wellbeings – the rollout of IBLI has faced numerous challenges, as Takaful Insurance of Africa, IBLI’s current private sector partner, can attest.

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Largest-ever micro-insurance payout made to Ethiopian pastoralists

ILRI news

Pastoralist receive an indemnity payment after livestock losses More than 2,250 pastoralists received insurance payouts following the extremely poor rains this year in southern Ethiopia.

More than 2,250 pastoralists received insurance payouts following the extremely poor rains this year in southern Ethiopia. Low levels of rainfall have led to the loss of approximately 300,000 livestock in 2017 in the Borana zone of the southern Oromia region. The insurance payouts of more than ETB 5.233 million (USD 220,000) was the largest-ever micro-insurance indemnity made in Ethiopia. Each insured pastoralist received an average of ETB 2,255 (USD 96), which will allow the herders to purchase feeds for their surviving animals and to restock their herds.

Pastoralists in northern Kenya and southern Ethiopia have been insured by an index-based livestock insurance (IBLI) scheme devised in 2008 by the International Livestock Research Institute (ILRI) and its technical partners at Cornell University and the University of California at Davis. The Ethiopian component of…

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Why direct climate funding to African farmers will pay off

As the world descends on Morocco for the annual United Nations climate conference, the host nation is championing an unlikely hero: African agriculture.

After launching the ambitious Adaptation of African Agriculture (AAA) initiative in September, the Moroccan government seeks to mobilise $30bn of investment for the sector that is under the most significant threat from climate change, in the region that is the least equipped to deal with it. According to current estimates, the negative effects of climate change are already reducing Africa’s GDP by about 1.4 per cent, and the costs arising from adaptation to climate change are set to reach an annual three per cent of GDP by 2030. A principal victim of this is the agriculture sector, which not only feeds the chronically food-insecure continent, but forms the backbone of its economy and its route out of poverty.

A new study out this week led by the International Fund for Agricultural Development shows that Morocco’s approach may well be on the right track. It confirms that investment in climate-sensitive approaches for smallholder farmers can more than double farmer incomes – meaning directing climate funding for adaptation in African agriculture would make both climate and economic sense.

However, Africa currently only attracts around 5 per cent of climate funding. This is despite the fact that six of the 10 countries most affected by climate change are in Africa, and every single African nation that submitted climate adaptation strategies to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris last year, included agriculture in its plans. Read more

For pioneering livestock index insurance, World Food Prize Award honors World Bank grantee

This past October, Andrew Mude of the International Livestock Research Institute (ILRI) received the World Food Prize International Symposium’s top honor — the Norman Borlaug Award for Field Research and Application — for his work on developing livestock index insurance in the lowlands of East Africa.

Mude’s award highlights the crucial role innovative financial solutions play in protecting cattle farming against climate disruptions, which pose a serious threat to the livelihoods of African herders and consumers. Financial instruments, such as index insurance schemes, serve as shock absorbers for the vulnerable in building resilience and adaptation to climate, according to the ‘Anticipate, Absorb, Reshape’ (A2R) initiative unveiled at COP21 last year.

Food security and resilience-building have become central in the international development community’s efforts to help developing countries and vulnerable populations manage climate change. Read more

How satellites and insurance are securing livestock in East Africa

In many parts of East Africa livestock provide the livelihoods for many herders and pastoralists who, especially with climate change on the rise, are often faced with severe threats from droughts

A particularly bad drought could wipe out most of a herders livestock, leaving them without a source of food or income and with little recourse. It’s a problem that inspired Andrew Mude and his colleagues to launch Index-Based Livestock Insurance, a technology-enabled insurance program to protect herders against the devastating effects of drought.

Developed in partnership with International Livestock Research Institute, Cornell University and University of California Davis, IBLI uses data gathered by satellite to create a vegetation index that can be used to track the density of vegetation available to pastoralists. When the available food for livestock falls below an agreed upon threshold, it indicates there is a drought and the IBLI program compensates herders and pastoralists if they suffer a loss.

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Index Based Livestock Insurance (IBLI), E-learning Course Launch

Elearning launchAre you interested in knowing just how Index Based Livestock Insurance works? Lessons on IBLI and the Asset Protection Contract are now just a click away! You can easily access your IBLI lessons from ILRI’s e-Learning portal http://learning.ilri.org/.  The IBLI e-Learning course was launched on the 22nd of March 2016 at the International Livestock Research Institute’s (ILRI) campus in Nairobi, Kenya. Various stakeholders including Kenya Government officials from the State Department of Livestock (SDL), insurance companies, donor organizations and partner NGOs attended the launch ceremony. In his opening remarks, ILRI’s Director General Dr. Jimmy Smith reiterated the fact that Capacity Development is a critical success factor for ILRI and that stakeholders must focus on enhancing pastoralism as it is a major contributor to the national Gross Domestic Product.

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