The Performance of Index Based Livestock Insurance: Ex Ante Assessment in the Presence of a Poverty Trap

Chantarat, Sommarat; Mude, Andrew G.; Barrett, Christopher B.; Turvey, Calum G.

doi:10.2139/ssrn.1844751

Cited by 12 publications

(17 citation statements)

References 28 publications

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“…Insurance stabilizes asset accumulation by reducing the negative impact of weather shocks. Insurance also fosters investment, because it reduces the uncertainty of returns (Mude et al 2009) (box 10.2).…”

Section: Instruments To Transfer Riskmentioning

confidence: 99%

“…Index-based livestock insurance seeks to interrupt the downward spiral of vulnerability, drought, and poverty in northern Kenya-a process that is exacerbated by climate change. Northern Kenya is home to 3 million pastoralist households and is prone to severe droughts (Mude et al 2009). Pastoralists earn a livelihood by grazing cattle (also sheep, pigs, and poultry) on semiarid to arid land and by selling meat, milk, and eggs (image 10.3).…”

Section: Innovative Practice Summary Ict Enables Innovative Index-basmentioning

confidence: 99%

“…This procedure allowed for actuarially fair pricing of the index insurance (Mude et al 2009 (Mude et al 2009). …”

Section: Image 103 Pastoralism In Africa Is a Critical Means To Rurmentioning

confidence: 99%

“…The results will help design any modifications in the insurance program and influence decisions on scaling up the pilot to other areas. The plan is to expand the program throughout the country if it proves successful in Marasabit District (Mude et al 2009). Meanwhile, an ex ante assessment of the insurance found that:…”

Section: Impact Scalability and Sustainabilitymentioning

confidence: 99%

“…Simple simulations find that relatively inexpensive, partial subsidization targeted to households with herd sizes in specific ranges can significantly increase average wealth and decrease poverty, at a rate of just $20 per capita per one percent reduction in the poverty headcount rate." Chantarat et al 2009 This last point has implications for sustainability, which faces substantial financial hurdles if the product cannot be commercially viable. The development and pilot of the program were funded by Financial Sector Deepening Trust in Kenya, the UK Department for International Development (DFID), and USAID (Waruru 2009), but plans to expand nationally would require substantial private investment.…”

Section: Impact Scalability and Sustainabilitymentioning

confidence: 99%

See 4 more Smart Citations

Using ICT for Remote Sensing, Crowdsourcing, and Big Data to Unlock the Potential of Agricultural Data

Woodard¹,

Andriessen²,

Cohen³

et al. 2017

ICT in Agriculture (Updated Edition): Connecting Smallholders to Knowledge, Networks, and Institutions

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Section: Instruments To Transfer Riskmentioning

confidence: 99%

Section: Innovative Practice Summary Ict Enables Innovative Index-basmentioning

confidence: 99%

“…This procedure allowed for actuarially fair pricing of the index insurance (Mude et al 2009 (Mude et al 2009). …”

Section: Image 103 Pastoralism In Africa Is a Critical Means To Rurmentioning

confidence: 99%

Section: Impact Scalability and Sustainabilitymentioning

confidence: 99%

Section: Impact Scalability and Sustainabilitymentioning

confidence: 99%

See 3 more Smart Citations

Using ICT for Remote Sensing, Crowdsourcing, and Big Data to Unlock the Potential of Agricultural Data

Woodard¹,

Andriessen²,

Cohen³

et al. 2017

ICT in Agriculture (Updated Edition): Connecting Smallholders to Knowledge, Networks, and Institutions

View full text Add to dashboard Cite

Climate Smart Agriculture

Lipper¹,

McCarthy²,

Zilberman³

et al. 2018

Natural Resource Management and Policy

107

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Can Insurance Help Manage Climate Risk and Food Insecurity? Evidence from the Pastoral Regions of East Africa

Carter

Janzen

Stoeffler

2017

Climate Smart Agriculture

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Can insurance cost-effectively mitigate the increasingly deleterious impacts of climate risk on poverty and food insecurity? The theory reviewed in this chapter suggests an affirmative answer if well-designed insurance contracts can be implemented and priced at a reasonable level despite the uncertainties that attend climate change. Evidence from the IBLI index insurance project in the pastoral regions in East Africa suggest that these practical difficulties can be overcome and that insurance can have the impacts that underlay the positive theoretical evaluation. At the same time, continuing analysis of the IBLI experience suggests that much remains to be done if quality index insurance contracts are to be scaled up and sustained. We conclude that insurance is not an easy, off-the-shelf solution to the problem of climate risk and food insecurity. Creativity in the technical and institutional design of contracts is still required, as are efforts to forge the more effective publicprivate partnerships needed to price insurance at levels that will allow insurance to fulfill its potential as part of an integrated approach to social protection and food security in an era of climate change.There is ample evidence that climate shocks create and sustain poverty and food insecurity in rural regions of the developing world. There is also ample evidence that climate change is increasing the frequency and severity of climate shocks.

show abstract

The Performance of Index Based Livestock Insurance: Ex Ante Assessment in the Presence of a Poverty Trap

Cited by 12 publications

References 28 publications

Using ICT for Remote Sensing, Crowdsourcing, and Big Data to Unlock the Potential of Agricultural Data

Using ICT for Remote Sensing, Crowdsourcing, and Big Data to Unlock the Potential of Agricultural Data

Climate Smart Agriculture

Can Insurance Help Manage Climate Risk and Food Insecurity? Evidence from the Pastoral Regions of East Africa

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