This study used longitudinal household data to determine which factors affected demand for index based livestock insurance (IBLI). While both price and the non-price factors studied previously are indeed important, the findings indicate that basis risk and spatiotemporal adverse selection also play a major role in determining demand for IBLI.
This study uses economic approaches and the case of the index based livestock insurance (IBLI) product in Kenya to compare the quality of insurance products developed from a variety of satellite -based indices, all of which have either been proposed or are/have been used by insurance or insurance-like products in the region.
Social protection programs are designed to help vulnerable populations—including pastoralists—maintain a basic level of wellbeing, manage risk, and cope with negative shocks. The research team uses evidence-based to understand the poverty dynamics in the pastoralist-based economy of northern Kenya’s arid and semi arid lands as a case study to discuss and compare the observed impacts of two different social protection schemes on heterogeneous pastoralist households.
The research team describes the methodology used to design the contract and its underlying index of predicted area-average livestock mortality in Index-based Livestock Insurance. The Principal Investigator describes the contract pricing and the risk exposures of the underwriter to establish IBLI’s reinsurability on international markets.
This paper evaluates the effectiveness of a new index-based livestock insurance (IBLI) product designed to compensate for area average predicted livestock mortality loss in northern Kenya, where previous work has established the presence of poverty traps.