Designing index based livestock insurance for managing asset risk in northern Kenya

This article describes a novel index-based livestock insurance (IBLI) product piloted among pastoralists in Northern Kenya, where insurance markets are effectively absent and uninsured risk exposure is a main cause of poverty. We describe the methodology used to design the contract and its underlyin...

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Bibliographic Details
Main Authors: Chantarat, S., Mude, Andrew G., Barrett, Christopher B., Carter, M.R.
Format: Journal Article
Language:Inglés
Published: Wiley 2013
Subjects:
Online Access:https://hdl.handle.net/10568/17235
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author Chantarat, S.
Mude, Andrew G.
Barrett, Christopher B.
Carter, M.R.
author_browse Barrett, Christopher B.
Carter, M.R.
Chantarat, S.
Mude, Andrew G.
author_facet Chantarat, S.
Mude, Andrew G.
Barrett, Christopher B.
Carter, M.R.
author_sort Chantarat, S.
collection Repository of Agricultural Research Outputs (CGSpace)
description This article describes a novel index-based livestock insurance (IBLI) product piloted among pastoralists in Northern Kenya, where insurance markets are effectively absent and uninsured risk exposure is a main cause of poverty. We describe the methodology used to design the contract and its underlying index of predicted area-average livestock mortality, established statistically using longitudinal observations of household-level herd mortality fit to remotely sensed vegetation data. Household-level performance analysis based on simulations finds that IBLI removes 25–40 percent of total livestock mortality risk. We describe the contract pricing and the risk exposures of the underwriter to establish IBLI's reinsurability on international markets.
format Journal Article
id CGSpace17235
institution CGIAR Consortium
language Inglés
publishDate 2013
publishDateRange 2013
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spelling CGSpace172352025-06-13T04:20:13Z Designing index based livestock insurance for managing asset risk in northern Kenya Chantarat, S. Mude, Andrew G. Barrett, Christopher B. Carter, M.R. livestock mortality pastoralism This article describes a novel index-based livestock insurance (IBLI) product piloted among pastoralists in Northern Kenya, where insurance markets are effectively absent and uninsured risk exposure is a main cause of poverty. We describe the methodology used to design the contract and its underlying index of predicted area-average livestock mortality, established statistically using longitudinal observations of household-level herd mortality fit to remotely sensed vegetation data. Household-level performance analysis based on simulations finds that IBLI removes 25–40 percent of total livestock mortality risk. We describe the contract pricing and the risk exposures of the underwriter to establish IBLI's reinsurability on international markets. 2013-03 2012-05-28T16:54:14Z 2012-05-28T16:54:14Z Journal Article https://hdl.handle.net/10568/17235 en Open Access Wiley Chantarat, S., Mude, A.G., Barrett, C.B. and Carter, M.R. 2013. Designing index based livestock insurance for managing asset risk in northern Kenya. Journal of Risk and Insurance 80(1):205-237.
spellingShingle livestock
mortality
pastoralism
Chantarat, S.
Mude, Andrew G.
Barrett, Christopher B.
Carter, M.R.
Designing index based livestock insurance for managing asset risk in northern Kenya
title Designing index based livestock insurance for managing asset risk in northern Kenya
title_full Designing index based livestock insurance for managing asset risk in northern Kenya
title_fullStr Designing index based livestock insurance for managing asset risk in northern Kenya
title_full_unstemmed Designing index based livestock insurance for managing asset risk in northern Kenya
title_short Designing index based livestock insurance for managing asset risk in northern Kenya
title_sort designing index based livestock insurance for managing asset risk in northern kenya
topic livestock
mortality
pastoralism
url https://hdl.handle.net/10568/17235
work_keys_str_mv AT chantarats designingindexbasedlivestockinsuranceformanagingassetriskinnorthernkenya
AT mudeandrewg designingindexbasedlivestockinsuranceformanagingassetriskinnorthernkenya
AT barrettchristopherb designingindexbasedlivestockinsuranceformanagingassetriskinnorthernkenya
AT cartermr designingindexbasedlivestockinsuranceformanagingassetriskinnorthernkenya