Case Brief: IFFCO-Tokio General Insurance Co.


About 1 billion people, around 70 per cent of the world’s population living in extreme poverty, depend on livestock for their livelihood. Small farmers in India generate nearly half of their income from livestock and the value of cattle represents a significant part of their wealth, so the death of cattle poses a significant risk and affects farmers’ net worth and income. Yet efforts to provide livestock insurance in India have struggled because of high claims ratios, with public insurers frequently experiencing claims ratios of 150 to 350 per cent. A major driver has been fraud, since it is very difficult to identify whether the animal in the claim is the insured animal. Use of external ear tags identifying insured cattle are often ineffective as they can be easily manipulated. This case brief, published by ILO’s Microinsurance Innovation Facility, looks at Pashu Dhan Bima, a livestock wealth insurance project in India, which was initially a credit-linked cattle insurance product for farmers taking loans for cattle. After the pilot, it also became available to farmers not taking loans, as it protects the farmer against the death of insured cattle due to disease or accident. The new identification technology, Radio Frequency Identification Devices (RFIDs), is used to identify cattle and reduce fraud.






Michal Matul, Aparna Dalal, Alice Merry



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