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

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Title Designing index based livestock insurance for managing asset risk in northern Kenya
 
Creator Chantarat, Sommarat
 
Contributor Mude, Andrew
Barrett, Christopher
Carter, Michael
 
Subject livestock mortality
drought risk management
weather derivatives
index insurance
 
Description This article describes a novel indexbased
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 areaaverage
livestock mortality, established statistically using longitudinal observations of
householdlevel
herd mortality fit to remotely sensed vegetation data. Householdlevel
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.
 
Date 2013-03-15
2017-01-05T19:40:31Z
2017-01-05T19:40:31Z
 
Type Journal Article
 
Identifier https://mel.cgiar.org/reporting/download/hash/7rHUOP1o
Sommarat Chantarat, Andrew Mude, Christopher Barrett, Michael Carter. (15/3/2013). Designing index based livestock insurance for managing asset risk in northern Kenya. Journal of Risk and Insurance, 80(1), pp. 205-237.
https://hdl.handle.net/20.500.11766/5198
Limited access
 
Language en
 
Rights CC-BY-NC-4.0
 
Format PDF
 
Publisher Wiley
 
Source Journal of Risk and Insurance;80,(2013) Pagination 205,237