Africa Asia Conclave on Loss and Damage Due to Climate Change Eastland Hotel, Nairobi 26 th August 2016

Transcription

1 Twards Sustainable Livestck Insurance fr Pastralists : A case f IBLI Dr. Rupsha R Banerjee Africa Asia Cnclave n Lss and Damage Due t Climate Change Eastland Htel, Nairbi 26 th August 2016

2 Cntext A sizeable cnstituent Over 50 millin pastralists in Sub Saharan Africa: ver 20 millin in the Hrn f Africa Eti Estimated tdcntributin tib ti t the livestck ecnmy at 40% in the Hrn f Africa Centrality f livestck in Nrthern Kenya and Suthern Ethipia Mdi Median pastralist thusehld h ldhlds 100% f their prductive assets in livestck Livestck prducts and sales f livestck are 40% f incme fr average husehld

3 Mtivatin Vulnerability t livestck lsses 75% f livestck lsses, amng pastralists, due t drught Catastrphic herd lss due t drught identified as the majr surce f vulnerability and cause f pverty Between 2008 and 2011 Kenyan ecnmy suffered US$ 12.1 billin in damages due t drught, ver 70% due t livestck lsses Standard respnses t drught cstly and inefficient Destcking/Restcking slw, expensive, targeting challenges, inefficiency Fd aid slw, expensive, targeting challenges, fster dependency Cash aid targeting challenges, fiscal sustainability, nt equally effective fr all

4 Why Index Based Livestck Insurance Insurance and independent index measure strngly crrelated ltdwith individual lss Better suited t the pastral prductin system and risk prfile Lwer transactin csts, mral hazard issuesthancnventinal insurance Sustainable Insurance can Prevent dwnward slide f vulnerable ppulatins Allws fcus humanitarian resurces n the needy Crwd in investment and accumulatin by the pr

5 Where we are currently wrking Prgram launched in 2008 t ffer a timely, sustainable, safety net against catastrphic drught shcks n pastralists. Currently implemented in Nrthern Kenya and Suthern Ethipia expanding t the whle ASALs f Kenya within PPP framewrk, and scaling in Ethipia Surce: Ggle images and Vrieling,2014

6 Challenges faced Infrastructure Pr basic infrastructure,lw literacy levels, security issues Understanding and acceptance Penetratin e f insurance less than 3% Mst pastralists dn t clearly understand the basic cncepts f IBLI and have liquidity cnstraints Instances f mis selling Cmpeting Expectatins Partners expectatins f cmmercial sustainability in 2 5 years Capacity Develpment Nn recurrence f infrmatin, remuneratin and crdinatin amng underwriters and agents

7 IBLI Prgramme Structure Plicyand institutinal develpment Cntract Design Index cnstructin Data precisin Drught Index Impact Assessment Market and CapDev Institutinal and Technical Capacity Specialiazed and custmized extensin and educatin tls Need based research Supprting a PPP plicy envirnment Delivery Mechanisms Innvatins twards market linkages Develping tls fr mnitring, extensin and dli delivery f essential services Crwdsurcing and citizen science Evidence f value and impact Infrmed effective demand

8 Hw we have vercme challenges

9 As a result f feedback frm cmmunities Kenya As f February 2016: 11,654 cntracts sld since 2010 Ethipia As f September 2015: 3,909 cntracts sld since 2012

10 Way Ahead fr Agriculture Insurance Experience tends t suggestthat that implementatinf f agricultural Insurance is mst efficient and effectively managed by the private cmmercial agricultural sectr Data Outreach Risk financing Cllect Audit Finance Innvative distributin channels Link t credit cedt Underwrite risk Participatin in c insurance pl Prduct Design and Develpment Prduct develpment Pricing Surce: WBG et al. Tward a Natinal Crp and Livestck Insurance Prgram fr Kenya. Oct 2015

11 Way Ahead fr Agriculture insurance cntd but successfully scaled up agricultural insurance prgrams typically require leadership and targeted supprt frm gvernment Data Outreach Risk Financing Cllect Audit Manage Finance Link t scial safety nets Link t credit Premium subsidies Awareness building Public sectr reinsurance Prmte cinsurance pl Financial supprt Supprt prduct design and develpment Prduct develpment and pricing (shrt run) Technical supprt fr insurers (lng run) Enabling envirnment Institutinal framewrk Legal framewrk Cnsumer prtectin Surce: WBG et al. Tward a Natinal Crp and Livestck Insurance Prgram fr Kenya. Oct 2015

12 Thank yu THE IBLI PROGRAM IS A COLLABORATIVE EFFORT OF MANY PARTNERS Fr mre infrmatin, visit

13 Thank yu fr yur attentin Questins and Cmments??