On average, AMA Innovation Lab researchers find that after the drought, insurance leads to a 36 percent decrease in sales of remaining livestock, and a 25-percent reduction in household meal consumption.
Index insurance shows considerable promise, especially in settings like the arid and semi-arid lands of east Africa where conventional insurance to cover potentially catastrophic herd losses does not exist.
Index-based livestock insurance (IBLI), aims to protect against the covariate risk of catastrophic livestock loss due to drought. Understanding what determines access to IBLI by gender can shape strategies to equitably provide access to this and other innovative risk management products.
The Borana plateau in southern Ethiopia is a vast arid and semi-arid pastoralist territory. Livestock in this area comprise the majority of household’s non-human capital and are responsible for more than two-thirds of their average income.
Pastoralist households in the arid and semi-arid areas of northern Kenya are especially vulnerable to the risk posed by climate change. This risk-reduction strategy has the effect of keeping households poorer than they need to be.