Livestock Insurance Program Speed up in Mongolia
The Government of Mongolian with the help of the World Bank is implementing the Index-Based Livestock Insurance Program (IBLIP) since 2006.
Insurance is provided through partnering with local private insurance companies such as “Mongol Insurance”, “Bodi Insurance”, “Prime Insurance” and “Practical Insurance”. Last year alone, out of MNT1.8 billion planned to grant as compensation of the index based livestock insurance, the Government started to allocate MNT622 million to herders from 48 soums of four provinces, through Khan Bank of Mongolia.
The pilot project for IBLIP was launched in 2006 and was implemented into three of 21 provinces, including Bayankhongor, Uvs and Khentii. Six further provinces were added in 2009 and 2010. Following the pilot program’s success, IBLIP has received funding to eventually expand to reach herders in all of Mongolia’s 21 provinces by 2013. The Project Implementation Unit has prepared a detailed action plan to support the scale up and has completed the recruitment process for province coordinators.
An index-based insurance program based on livestock mortality rates by species and soum (county) was recommended by the Bank. In 2005 the Government entered into a credit agreement with the World Bank to implement the IBLIP. The approach is a combination of self-insurance, market based insurance and a social safety net. Herders bear the cost of small losses that do not affect the viability of their business, larger losses are transferred to the private insurance industry and only the final layer of catastrophic loss is borne by the Government of Mongolia. The total International Development Association’s contribution is US$17.75 million. This figure includes the recent additional financing for IBLIP’s scale up which was approved by the Board in February 2010. IBLIP is currently co-financed by the Japanese Government (US$1.3 million), the Swiss Agency for Development and Cooperation (US$0.6 million), and the Korean Government (US$0.7 million). The Government of Mongolia financed US$322.9 thousand for the program.
Insurance is provided through partnering with local private insurance companies such as “Mongol Insurance”, “Bodi Insurance”, “Prime Insurance” and “Practical Insurance”. Last year alone, out of MNT1.8 billion planned to grant as compensation of the index based livestock insurance, the Government started to allocate MNT622 million to herders from 48 soums of four provinces, through Khan Bank of Mongolia.
The pilot project for IBLIP was launched in 2006 and was implemented into three of 21 provinces, including Bayankhongor, Uvs and Khentii. Six further provinces were added in 2009 and 2010. Following the pilot program’s success, IBLIP has received funding to eventually expand to reach herders in all of Mongolia’s 21 provinces by 2013. The Project Implementation Unit has prepared a detailed action plan to support the scale up and has completed the recruitment process for province coordinators.
An index-based insurance program based on livestock mortality rates by species and soum (county) was recommended by the Bank. In 2005 the Government entered into a credit agreement with the World Bank to implement the IBLIP. The approach is a combination of self-insurance, market based insurance and a social safety net. Herders bear the cost of small losses that do not affect the viability of their business, larger losses are transferred to the private insurance industry and only the final layer of catastrophic loss is borne by the Government of Mongolia. The total International Development Association’s contribution is US$17.75 million. This figure includes the recent additional financing for IBLIP’s scale up which was approved by the Board in February 2010. IBLIP is currently co-financed by the Japanese Government (US$1.3 million), the Swiss Agency for Development and Cooperation (US$0.6 million), and the Korean Government (US$0.7 million). The Government of Mongolia financed US$322.9 thousand for the program.
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