A critical review of Index-Based Livestock Insurance (IBLI)

First in Mongolia in Central Asia and now in Kenya and Ethiopia in Eastern Africa, pilots are being carried out with Index-Based Livestock Insurance (IBLI). A critical review of the experiences can be found in the report “The feasibility of Index-Based Livestock Insurance (IBLI) in the West African Sahel: framing the issue” (2016, 52pp) by Brigitte Thébaud. This exploratory study of microinsurance issues linked to livestock in the context of transborder mobility in West Africa was carried out in the framework of the project “Building household economic resilience through livestock productivity in the south and east of Mauritania”, funded by the European Union. This project is aligned with the UKAID-funded BRACED (Building Resilience and Adaptation to Climate Extremes and Disasters) programme implemented by Acting for Life (AFL) since 2015, which also covers Mali, Niger, Burkina Faso and Senegal.

The study drew on a review of the literature related to microinsurance in general and to agricultural insurance in particular. Given the growing popularity of IBLI systems, it focused on livestock insurance in Mongolia and northern Kenya.

The conclusions were that the experiences derived from the IBLI products developed in the context of extensive livestock systems in Mongolia and Kenya, instead of encouraging direct application of these products in the Sahelian context, call rather for extreme caution. It is not certain that the conditions are in place in West Africa to enable an informed debate that can bring together the key stakeholders, including the potential beneficiaries, both the herders themselves as well as the operators in the livestock marketing value chain.

The study was an input into the 2016 workshop in Dakar, Senegal, on “Livestock insurance for mobile herders in West Africa” (2017, 108pp), which included a case example of IBLI in northern Kenya. Pastoralists were among the workshop participants. The proceedings reflect the detailed discussion of the applicability of IBLI in West Africa, including issues of herd dynamics and mobility, the relation between herding and climate variability, pastoral risk and the impacts of insurance on livelihood systems and poverty reduction. The first conclusion of the workshop was that too many questions still remain unanswered to allow for a simple and mechanical transfer (to the Sahelian situation) of insurance products designed and developed in very different contexts, such as in Mongolia and Kenya.

Posted on 5 November 2017 in Pastoralism & Mobility, Pastoralism & Services, Pastoralist Livelihoods & Nutrition