It’s all systems go for the scaling up of index-based livestock insurance in Ethiopia

For close to a decade, the International Livestock Research Institute (ILRI) and its partners in the public, private and non-profit sectors have been engaged in designing and implementing index-based livestock insurance (IBLI) to protect livestock keepers from drought related asset losses. Introduced in Ethiopia in 2012, the conversation on IBLI is gaining momentum with more stakeholders investing in efforts towards its delivery, as well as the provision of other related agricultural index insurance products. 

The value of IBLI has been demonstrated, for instance, by record payouts to insured pastoralists in Borana during the 2017 droughts and by the increased coverage of projects around crop-based index insurance. Based on this, the time was deemed ripe to convene a structured, purposeful conversation around catalysing a sustainable scale of IBLI and agricultural index insurance in Ethiopia.

On 10 July 2018, ILRI’s IBLI team with support from the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) delivered a policy workshop, at the ILRI campus in Addis Ababa, that brought together key government policy and decision makers, researchers, private sector and development partners’ representatives to share experiences on agricultural insurance. More specifically, the purpose of this policy dialogue was to outline a concrete process towards the effective widespread provision of index-based livestock insurance, and more broadly agriculture insurance in Ethiopia.

Participants at the policy dialogue on scaling IBLI in Ethiopia_11th July 2018 Bethlehem Alemu

Participants of the policy dialogue workshop on scaling IBLI in Ethiopia (photo credit: ILRI/Bethlehem Alemu).

Prof. Fekadu Gebre, state minister, Ministry of Agriculture and Livestock Development in Ethiopia was present at the meeting. His presence at the policy dialogue spoke not only to the criticality of the discussion on livestock insurance, but also to the commitment of the Ethiopian government to identify effective strategies for helping livestock herders and farmers manage the risks of drought. In his address to the participants, he highlighted the government’s recognition that IBLI is targeting one of the critical limiting factors faced by pastoralists—drought-related livestock mortality. He also noted that insurance can allow government to proactively and more cost-efficiently respond to severe drought risks and stated that the conversation on micro insurance in Ethiopia is timely. 

Various in-depth presentations from ILRI researchers, CTA, government and the private sector highlighted the extent of drought-related losses and the impact of such losses on pastoralists and their governments. Presentations and discussions also affirmed agricultural insurance and specifically livestock insurance, as an effective and cost-efficient tool for enhancing pastoralists’ resilience to drought. Participants delved into the specific experiences of the Index-based Livestock Insurance Program and strategic lessons related to supporting its sustainable scale. Experiences from the Kenya Livestock Insurance Program were presented as was the IBLI program in Ethiopia. As the policy dialogue was also aimed at capturing perspectives and identifying synergies for scale from a range of crop insurance pilots, representatives from the Oromia Insurance Company, Nyala Insurance, the Agricultural Transformation Agency and the United Nations World Food Programme also presented their lessons and experiences on weather index and micro insurance focusing on motivation, progress, trends and challenges of index-insurance in Ethiopia.

Participants at the livestock insurance policy diaogue in Addis Ababa Prof. Fekadu state minister, Ministry of Livestock and Agriculture, Ethiopia at the livestock insurance policy diaogue in Addis Ababa

Participants (left) and Prof. Fekadu Gebre, state minister, Ministry of Agriculture and Livestock Development in Ethiopia (right), at the policy dialogue workshop (photos credit: ILRI/Sarah Kasyoka).

An expertly facilitated conversation ensured that participants engaged in productive and insightful conversations, uncovering critical issues for consideration around the value and challenges of scaling index-insurance in Ethiopia. Insights from the sessions emphasized the critical role of an enabling policy and regulatory environment in facilitating uptake of index insurance in Ethiopia. There was also agreement across the board that insurance needs to be bundled with other services such as micro-credit to increase uptake. The place of information and communication technology was also recognized as key in making insurance services available for smallholder producers and pastoralists. Leveraging technology was highlighted as a critical factor in minimizing the cost of delivering insurance products through; efficient beneficiary registration, digital sales services, insurance payouts (mobile money transfers), and information dissemination. 

Panel discussions allowed participants to delve deeper into issues pertinent to the scaling up of index-based livestock insurance in Ethiopia and establishing a concrete way forward. Key recommendations to this effect were articulated, among them being the need to establish a process under an empowered authority to define specific needs, outline actions and coordinate efforts to establish a sustainable agricultural index insurance program in Ethiopia. The national government (Ministry of Agriculture and Livestock Development) was unanimously identified as best-placed to host such a process and offer leadership for the development and scaling up of crop and livestock insurance programs in the country. There was also firm commitment expressed by all partners including the government, CTA, ILRI, and private insurance companies to deploy efforts and resources to move the process of scaling up index insurance in Ethiopia forward.

It is envisioned that all stakeholders will now engage in concrete action to begin to implement the key recommendations reached, to continue to achieve impact for smallholder farmers and herders.

The workshop was sponsored by CTA through its Climate and Markets East Africa (C-LI-MARK) Program as part of CTA’s broader support to the sustainable scale of index-based livestock insurance initiatives in partnership with ILRI, the Oromia Insurance Company and Takaful Insurance of Africa.

RESULTS UK policy report features lessons from IBLI

A new policy report published by RESULTS UK this week, highlights the Index-Based Livestock Insurance (IBLI) Program in Kenya, as one of the initiatives that are successfully reaching vulnerable people with climate risk insurance in developing countries.

The report, which was launched 11 May 2016 ahead of the World Humanitarian Summit, highlights ‘unprecedented opportunities for donors to reach an additional 400 million vulnerable people with climate risk insurance by 2020 through the G7 “InsuResilience” Initiative’. It brings together a weight of evidence about the protective, promotive and transformative effects of insurance in building climate resilience. The report also includes a series of case-studies demonstrating the real impacts of cutting-edge weather-based insurance programs.

Experiences from IBLI in Kenya, were used by the government in Kenya to launch the ‘Kenyan Livestock Insurance Programme’ which is covering small-scale farmers and herders against weather-related crop failure and loss of livestock.

Read the whole report: Weathering a risky climate: New policy report launched by RESULTS UK.

The drivers of index-based livestock insurance demand in southern Ethiopia

Read the latest post in the Economics That Really Matters blog that details the findings of a paper written by Index-Based Livestock Insurance (IBLI) Project researchers. Recently published in World Development, the paper examines and identifies the constraints that hinder the demand of index insurance in southern Ethiopia—uptake of index insurance has been disappointingly low, rarely above 30% of the intended population, across the several contexts in which it has been introduced, despite claims that index insurance has several advantages over traditional agricultural insurance in reducing moral hazard, adverse selection, and transaction costs associated with verification of individual losses.

Read the full article here

Call for IBLI Enumerators!!

Applications are invited to fill position of Enumerator for the Index-Based Livestock Insurance (IBLI) Project. This is a temporary position for a period of 7 weeks beginning 14th September and closing on 31st of October 2015. Learn more about IBLI project at or on Facebook and Twitter.

Candidates should have Bachelor’s degree in Sociology, Natural Resources Management, Agricultural Economics and related fields. We accept limited applications from interested candidates whose highest level of education is a Diploma as long they have sufficient experience conducting household surveys fielded by reputable organizations. Female candidates who qualify and are interested are strongly encouraged to apply.

Applications to be considered should be from the following Sub-Locations of Marsabit and be fluent in the following languages in addition to English and Kiswahili:

  • Sagante (Gabra or Boran)
  • Dirib Gombo (Gabra or Boran)
  • Dakabaricha (Gabra or Boran)
  • Elgade (Gabra)
  • Kalacha (Gabra)
  • Bubisa (Gabra)
  • Turbi (Gabra)
  • Karare/Logologo (Samburu)
  • Lontolio (Samburu)
  • Illaut (Samburu)
  • Ngurunit (Samburu)
  • South Horr (Samburu)
  • Kargi (Rendile)
  • Kurukum (Rendile)
  • Loiyangalani (Turkana, Samburu, or Rendile)

Candidates should be computer literate and have strong communication skills. Successful candidates will undergo a two (2) weeks intensive training before the survey begins. Remuneration is based on the number of questionnaires successfully completed, with maximum 2 questionnaires per day. On successful completion of the 1st and 2nd questionnaire enumerators earns Kshs 900 and Kshs 1100 respectively.

Please send your application to attaching the following four items:

  1. Application Letter (Maximum 200 words): provide mobile phone number(s)
  2. Scanned copy of chief’s or assistant chief’s letter confirming you are a resident of his or her Location or Sub-location, signed and stamped
  3. Curriculum Vitae
  4. Scanned copies of bachelor or/and diploma degree certificates

Please note that an application will not be reviewed if the application lacks any of the four items above.

Application Deadline is 30th of August 2015; Applicants who will not get reply by 10th September 2015 should consider themselves unsuccessful

Index-based insurance: a pathway out of poverty?

Index insurance may be a powerful tool for protecting farmers from the risks of a changing climate. Photo: K. Holt (Africa Practice)

Index insurance may be a powerful tool for protecting farmers from the risks of a changing climate. Photo: K. Holt (Africa Practice)

A recent workshop sought solutions to index insurance challenges.

If the rains fail, a farmer can lose everything. With even the chance of a bad year, investing in new crop varieties and technologies might be too risky. Year after year, she’s caught in the trap of low production.

Weather index-based insurance emerged at the beginning of the 21st century as a new tool to help change this story. The innovative insurance scheme aims to arm farmers against climate uncertainty where traditional crop insurance isn’t viable.

With this promise, researchers within the CGIAR agricultural research partnership want to find out how this tool can enable farmers to try out new seeds and production technologies that might help secure their food supply in a changing climate.

The CGIAR Research Programs on Climate Change, Agriculture and Food Security (CCAFS) and Policies, Institutions and Markets (PIM) brought together experts from across the CGIAR research partnership at the International Food Policy Research Institute (IFPRI) in Washington, DC 20-22 January, 2014 to tackle this question, and build new collaborations towards answering it.

Read more ……Alexa Jay (CCAFS Climate risk management), Feb 25, 2014.