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IFFCO-Tokio General Insurance

About the Project
Project Name: 
Loss mitigation in live stock insurance through electronic identification chip technology
Type of Facility Project: 
Innovation Grant
País de operaciones: 
Asia and the Pacific
Project Thematic Focus: 
Product design
Agriculture and livestock - indemnity-based livestock
Type of Risk Carrier: 
regulated insurance company
Type of Distribution Channel: 
Credit union, cooperative or other member-based financial institution
Project Description: 

Animal husbandry and the dairy sector play an important role in the socio-economic development of India and protect poor farmers against shocks such as drought or famine. These livelihoods provide a major source of income to a large number of landless and rural people. In this context, livestock insurance is a critical service to mitigate the loss associated with the death of the animals. However, the claims for livestock insurance are often high due to the prevalence of moral hazard and fraud, reducing the availability of affordable coverage.

The project aims to test a model to reduce fraud by using an identification device placed under the hide of the animal (based on RFID technology - Radio Frequency Identification). The current means of identifying the insured animal is through ear tags, which can easily be lost or removed. By reducing fraudulent claims, the technology can benefit farmers through lower premiums to reflect the reduced claims. Additionally, the technology, used to store information about livestock such as vaccinations, can support the cooperatives and milk unions to improve herd management. The advent of more sustainable livestock insurance can also promote more product development, and invite other actors to enter the sector.


The project targets more than 25,000 poor farmers and their families in the states of Gujarat, Punjab, Maharashtra, Rajasthan and Orissa who depend on livestock as a main source of income. For these farmers, livestock is a continuous source of income, mostly from the milk produced and sold daily to milk producer cooperative societies.

Lessons from the Project
Learning Agenda: 
  • To what extent the implementation of the technology reduce fraudulent claims?
  • To what extent will farmers accept the new technology? How does the introduction of the technology improves value from livestock insurance for cattle owners?
  • What is overall impact of the technology and new related processes on costs, efficiency and profitability?
  • To what extent does the technology can be integrated within a livestock management system to improve animal health practices and herd management?
Emerging Lessons: 
  • Using RFID technology enabled IFFCO-Tokio to reduce fraud through more accurate identification of animal and changing business processes for livestock insurance. 
  • The RFID technology seems to be a cost-effective solution to make livestock insurance viable. 
  • RFID helped to understand risks and adverse selection in the context of livestock insurance. 
  • Contrary to previous concerns, the RFID driven cattle product is well accepted by clients. 
  • RFID technology and new process improved access to product
  • RFID chips improved claims experience of cattle insurance clients.
  • RFID clients benefit from the reduced premium and transaction costs.
About the Organization
Tipo de vínculo con el Fondo: 
Innovation grantee
Country of Head Office: 
Region : 
Asia and the Pacific
Type of institution : 
Insurance industry
Participation in Microinsurance: 
Risk carrier
Organizational Overview: 

IFFCO-Tokio General Insurance Co. Ltd. (ITGI) is a joint venture between Indian Farmers Fertilizer Cooperative Ltd (IFFCO), formed by more than 40,000 farmers' cooperatives, and Tokio Marine and Nichido Fire Inc of Japan. ITGI serves the insurance needs of the economically underprivileged rural masses across India through 52 strategic business units and a network of over 293 offices. ITGI is experienced in designing and marketing livestock microinsurance distributed through farmer cooperatives and cooperative banks.

More about the Organization