This Learning Journey was created with contributions from:
Brenda Wandera (ILRI), Pranav Prashad and Alice Merry (the Facility)
The International Livestock Research Institute (ILRI) seeks to reduce poverty and promote sustainable development for poor livestock keepers and their communities. One tool for managing the vulnerability of pastoralist households, particularly to drought, is index based insurance. ILRI, along with its partners Cornell University, the BASIS Research Program at the University of Wisconsin-Madison, and Syracuse University, have developed a research program that produces market-mediated index-based insurance products targeted at livestock keepers, particularly those in arid and semi-arid lands (ASALs).
ILRI received funding from the Facility to carry out a project to support three specific activities around the Index Based Livestock Insurance (IBLI) product and processes: marketing and communication, training and extension, and insurance operations and delivery channels.
The IBLI product was first launched in January 2010. It began with a pilot phase to test both the commercial viability of the product and the impact on the welfare of the target population. The project is designed to protect households from the economic shocks of livestock mortality due to drought. The product provides compensation in the event of drought-related livestock losses. However, IBLI does not cover livestock mortality due to non-drought related causes such as predators and disease.
ILRI’s commercial partners are Equity Insurance Agency, UAP Insurance Company and Swiss Re. If successful, the IBLI project could be replicated throughout similar districts in Kenya, the greater horn of Africa and the Sahel, and ASALs regions of southern Africa and south Asia.
The target population of the pilot project is the pastoralist population in the larger Marsabit district of Northern Kenya, made up of over 30,000 households with an average total herd of 120,000 cattle, 1 million sheep and goats, and 76,000 camels. In recent years the droughts in Kenya’s ASALs have become increasingly severe with devastating effects on the local population.
ILRI is also carrying out a research study on the determinants of insurance, as well as the impact of insurance on household’s economic decisions and welfare indicators. The evaluation is based on the randomized control trial concept and is conducted through a baseline survey of 900 households. The survey will be repeated annually for 3 years.
Date of last Learning Journey update: April 2013