CCAFS

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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Gamification and mLearning, effective pedagogic tools in livestock insurance

A pastoralist family checks their photo. Borana, Ethiopia (photo credit: ILRI\Zerihun Sewunet).

A pastoralist family checks their photo. Borana, Ethiopia (photo credit: ILRI\Zerihun Sewunet).

Despite numerous training programs delivered by governmental and non-government organizations in the arid and semi-arid land areas of Kenya and Ethiopia, little research has focused what forms of training are most effective and with which audiences. It is generally believed that mobile learning will be an effective pedagogic tool, given the high levels of mobile phone penetration in Kenya and the need to reinforce knowledge classroom-acquired knowledge through repetition over time.

For more information, see ILRI capacity development brief 4, Gamification and mLearning in the Index-Based Livestock Insurance project

The Index-Based Livestock Insurance (IBLI) project of the International Livestock Research Institute (ILRI) is addressing this need by conducting a randomized control trial (RCT) of an mLearning program for private sector sales agents of the IBLI product. This approach was taken after it was discovered that misinformation spread by agents selling the IBLI product—through private sector insurance agencies—risked damaging the reputation of a new product new before it reached critical mass.

One of the solutions currently being tested involves the use of mLearning combined with ‘gamification’ and financial incentives. mLearning involves the use of mobile devices as a learning platform—set to take off in Kenya where mobile phone penetration was 83.9 percent. The trials seek to establish the comparative utility of financial and gamification incentives to motivate the targeted learners to follow a sequence of micro-lessons reinforcing previous learning.

IBLI worked academics from the University of California, San Diego (UCSD), to develop a simple mLearning training program consisting of micro-lessons that could be conveniently read by ILRI agents. Prior to the August-September 2015 sales window, the mLearning app—the Pocket IBLT—was installed on the agents’ phone to trial the utility of the approach. To assess agent comprehension and motivate participation, each mLearning micro-lesson includes a simple quiz connected to a central server. Various alternative incentive structures are being trialled, including financial incentives and gamification.

For more information, see ILRI capacity development brief 4, Gamification and mLearning in the Index-Based Livestock Insurance project

This brief was published as part of an internal ‘capacity development’ week at ILRI in December 2015.

See all the ILRI capacity development briefs

Capacity development in the Index-Based Livestock Insurance project

Beneficiary of Takaful insurance payout in Wajir, northern Kenya

Shamsa Kosar, a beneficiary of Takaful insurance in Wajir, northern Kenya, in Mar 2014 (photo credit: ILRI/Riccardo Gangale)

Index-Based Livestock Insurance (IBLI) is the world’s first index-based insurance designed to protect vulnerable pastoralists in drought-stricken areas from losing their primary asset—livestock. First developed by the International Livestock Research Institute (ILRI) to insure pastoralists in Kenya and Ethiopia, this specialized insurance product has had a considerable impact on the asset base and consumption activities of its intended beneficiaries—nomadic populations living in an expansive area.

See ILRI capacity development brief 6, Capacity development in the Index-Based Livestock Insurance project

IBLI represents an exciting innovation by offering insurance to vulnerable rural smallholder farmers and livestock keepers and potentially reducing the climate-related risks they face. Initial analyses of IBLI projects have shown that insured households experienced: a 25% reduction in likelihood of poor nutrition; a 36% reduction in ‘distress sales’ of livestock (selling livestock to provide quick income in times of hardship); and a 33% reduction in reliance on food aid when compared to uninsured households. However, despite its ability to deliver social and economic returns to a population—traditionally neglected by financial services firms—IBLI’s uptake has been slower than expected.

This latest ILRI brief describes the opportunities and challenges emerging from the IBLI project. It looks at the various pressures from the market, governments, donors and partners related to IBLI’s growth strategy and future sustainability.

For more information, see ILRI capacity development brief 6, Capacity development in the Index-Based Livestock Insurance project

This brief was published as part of an internal ‘capacity development’ week at ILRI in December 2015.

See all the ILRI capacity development briefs

 

The favourable impacts of Index-Based Livestock Insurance: Evaluation results from Ethiopia and Kenya

A new research brief by the International Livestock Research Institute (ILRI) demonstrates that index insurance shows considerable promise, especially in settings where conventional insurance to cover potentially catastrophic herd losses does not exist.

However, index insurance products cannot practically provide complete risk coverage to policyholders and uptake of some index insurance products has been low, raising questions about their attractiveness, scalability and sustainability. At the same time, development institutions and organizations have invested millions in developing and piloting new index insurance products because there are potentially large benefits from even modestly reducing risk for agricultural households in developing countries.

Download the research brief

New study proves index based insurance can work for rural poor on large scale

The new study, carried out by the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS) and the International Center for Climate and Society (IRI) at Columbia University showcases projects that have overcome many of the challenges that have previously hindered the uptake of index-based insurance, such as poor infrastructure and lack of financing, and have gone on to scale to reach millions of smallholder farmers in some of the poorest areas of the world, many of which were previously considered uninsurable…

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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

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