N YALA I NSURANCE S.C. MI in Ethiopia NYALA’s Experience 2007-2110 NISCO - pioneer in both MI...
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NYALA INSURANCE S.C. MI in Ethiopia NYALA’s Experience 2007-2110 NISCO - pioneer in both MI products -Traditional Crop Insurance (MPCI) & WEATHER INDEX INSURANCE (WII) MPCI-1 st year 120,2 nd year827,3 rd year 1096….. WII is still in laboratory stage – (pilot project being scaled up) 1
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Transcript of N YALA I NSURANCE S.C. MI in Ethiopia NYALA’s Experience 2007-2110 NISCO - pioneer in both MI...
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MI in EthiopiaNYALA’s Experience 2007-
2110NISCO - pioneer in both MI
products-Traditional Crop Insurance (MPCI) & WEATHER INDEX INSURANCE (WII)
MPCI-1st year 120,2nd year827,3rd year 1096…..
WII is still in laboratory stage – (pilot project being scaled up)
- 1st year 337, 2nd year 2044 clients…
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Why MI? Problem Statement
low income HHshad no access OR ignored by regular insurance Scheme
cover for them was not a welcome idea by insurers
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Risky Business?
Insurance for low income - unsafe
Low income people- high risk- Have nothing to protect- Unprofitable- Unmanageable…
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Insuring poor ?
This is being recognized rapidly by - Government,
- Donors- NGO- Private sector
insurance works for poor If designed with the poor in mind
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Definition of MI
Protection of low income people against specific peril/s
in exchange for regular premium payments
Proportion to thelikelihood & cost of the
riskPremium on: full picture of
the risk5
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MI Covers
risks to RURAL & URBAN- Health- Life- disability
(breadwinner)- Mainly Property like
crop, livestock…6
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Actors in MI
Unlike microfinance, -often multiple partners involved in implementing MI program- Framers, Unions, Cooperatives…
- Metrology office, research institution- NGOs Local & Intern’l(AMEFI,REST,WFP,OA,IFPRI,WB), Donors, - Gov’t, Organizations
- MFI, Insurers, Reinsurers…7
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Micro insurance types
Many schemes are- relatively younger or- Some in the experimental phase- Many show great promise & innovation
- so called (1)Traditional Insurance (Indemnity)
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Micro insurance types
Indemnifies only clients suffer actual loss (principle of Indemnity)
Compensation is based on the extent of each & individual loss
(2) Index based Insurance- introduced recently in the market- individual compensation is based on ‘the formula’, not on actual loss 9
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Indemnity based…
- Submits corresponding payment
- Payout on magnitude of loss- relatively accurate payouts-Others entail higher admin. Cost Eg. Motor insurance
F&L insuranceMulti peril crop
insurance… 10
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Index Based Insurance
Relatively new conceptis alternative to Traditional Crop Insurance Program
Financial risk transferINDEX refers - the Insurance is based on an objectively verifiable measure
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Index Based Insurance…
Measures -Specific weather variable-At a specific weather station-Over a defined period of time
Measurable event is proxy for loss
Index Insurance Specifies - values allow payouts to be made 12
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Weather Index Insurance
Weather is the INDEXit is objectively measurable
Payment - according to whether,- reached certain predetermined thresholds of the weather- Weather index is that highly correlated with the particular risk adequately reflects losses
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WII…
Weather INDEX Ex. - rainfall (excess, drought)
- uses data from rain gauges near the farmer’s field.
- If the data shows the rainfall amount is below the threshold, the insurance pays out. (drought Index)
- Rather than payment on actual loss-
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WII…
Other Weather Indices - temperature, - humidity - crop yields,
- flood…
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Cattle Insurance (Indemnity,2011)
We Care We Protect 16
The cattle includes
a. Milk Cows
b. Calves/Heifers
c. Stud Bulls
d. Bullocks(castrated bulls) whether indigenous, exotic or cross-breed.
Note :Exotic animal means an animal, whose both
parent are foreign breed.Cross-bred animal means an animal, one of
whose parents is foreign breed
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Age-group
We Care We Protect 17
Types of animal Age
I A Milk cows(Indigenous/Cross-bred/Exotic ) 5-8 yrs
B Stud Bulls 3-8 yrs
C Bullocks (castrated bulls) 3-12 yrs
II Calves
Heifers
>90 days
>1 year
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Insurance Coverage
We Care We Protect 18
The policy gives indemnity for death of animals due to
accidentillness and disease (including epidemic
diseases)smoke, fire, lightning windstorm
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Thank you for
your attentionNyala Insurance S.C.
0116626667/180491/0911337601
