Since 2005, the Government of Mongolia started implementing Index-Based Livestock Insurance Project cooperating with World Bank in order to newly establish e system to protect the livestock sector from the risk. This project implemented successfully giving benefit to the herders and received gratitude from the people.
We aim to defend common rights of participant parties and increase the value of stake/share holders’ properties while offering and then selling the reinsurance products, which are consistent with the both insurer and insured’s basic needs as well as competitive on the world market.
Index-Based Livestock Insurance is a state policy which really focuses on the herders. Generally, there are many problems facing with the herders, for example: natural disasters including dzud, drought, and other livestock infectious deceases. IBLI helps the herders to be protected from these problems. This insurance is an insurance which is dedicated for only herders.
I started insuring my livestock from the beginning of the IBLI, in other words, 2006. And I received high amount of indemnity payment when there was short term spring disaster in 2010. I assume that this insurance is a way to secure the herders’s livelihood from the risk of unpreventable losses caused by drought and dzud etc. Some people tend to insure their livestock only in the harsh time.
Actually, I did not receive indemnity since 2010. There are also some people who says they won’t insure their livestock. But the main reason why we do insure the livestock is firstly, it is certain that we are going to face with the risk one day, and the herder who lost the livestock shall receive the indemnity contributed by the indemnity payment I paid. Secondly, even if we do not get indemnity at the year, the amount of the fund shall be increased. It means the fund shall be more trustworthy. Furthermore, if the insured gets much loss, the fund shall be enough for the large amount of indemnity. There is no guarantee for no risk. I think in other to be secure, it is better to be insured.
Every year, the herders of my soum insures the livestock. For this year, 110 herders of my soum insured the livestock. The insurance was such beneficial, therefore, the herders understood the advantage of the insurance well. This year, every herder insured their livestock. Higher the insurance value, more the gain. For my soum, If the livestock mortality rate exceeds the threshold of 6 percent, the herder who chose higher insurance value shall receive higher indemnity. The herders insured their livestock for the values of 50 percent shall receive much more indemnity. I would recommend the herders especially with less amount of livestock to choose the insurance value of 50-100 percent.