Examining the Feasibility of Livestock Insurance in Mongolia
Herders in Mongolia have suffered tremendous losses in recent dzud (winter disasters), with livestock mortality rates of over 50 percent in some locales. This study examines the feasibility of offering insurance to compensate for animal deaths. Suc...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/09/2014515/examining-feasibility-livestock-insurance-mongolia http://hdl.handle.net/10986/19291 |
| id |
okr-10986-19291 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-192912021-04-23T14:03:42Z Examining the Feasibility of Livestock Insurance in Mongolia Skees, Jerry R. Enkh-Amgalan, Ayurzana ACCOUNTING ACCOUNTING SYSTEMS ADULT MORTALITY ADVERSE SELECTION AGENTS AGRICULTURAL INSURANCE ANIMAL ANIMAL LOSSES ANIMALS APPLICATIONS ASSET DIVERSIFICATION AUDITING AUDITORS BREEDING BREEDING STOCK CAPITAL MARKETS CATTLE COMPULSORY INSURANCE COVERAGE DISASTERS ECONOMICS ECONOMIES OF SCALE FEED FEEDS FINANCIAL MARKETS FINANCIAL SECTOR FODDER FORAGE FRAUD GOATS GRAZING HERDERS HERDING HERDS HORSES INCOME INCREMENTAL COSTS INDEMNITY INSURANCE PRODUCTS INSURANCE SYSTEM INSURERS INTEGRITY LEGISLATION LIVESTOCK LIVESTOCK HERDERS LIVESTOCK INSURANCE LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS LIVESTOCK PRODUCERS LIVESTOCK PRODUCTION MORAL HAZARD MORTALITY NATURAL RESOURCES NOMADIC HERDERS POLICY MAKERS POLICY RESEARCH PRECIPITATION PREMIUMS PRIVATE BANKS PRIVATE INSURANCE PRIVATE INSURANCE COMPANIES RATES REINSURANCE REINSURANCE MARKETS RESERVES RISK MANAGEMENT RISK MITIGATION RISK SHARING SHEEP TRANSACTION COSTS UNDERWRITING WATER SUPPLY WILLINGNESS TO PAY LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS MORTALITY LEVELS INSURANCE CASUALTY ANIMAL HEALTH LIVESTOCK NUMBERS HERDERS Herders in Mongolia have suffered tremendous losses in recent dzud (winter disasters), with livestock mortality rates of over 50 percent in some locales. This study examines the feasibility of offering insurance to compensate for animal deaths. Such an undertaking is challenging in any country. Mongolia offers even more challenges given the vast territory in which herders tend over 30 million animals. Traditional approaches that insure individual animals are simply not workable. The opportunities for fraud and abuse are significant. Monitoring costs required to mitigate this behavior would be very high. This study focuses on the potential for using the livestock mortality rate at a local level (for example, the sum or rural district) as the basis for indemnifying herders. Applications of index insurance are growing around the world, although no country has so far implemented such insurance for livestock deaths. But few countries have such frequent and high rates of localized animal deaths as does Mongolia, and it is one of the few countries that perform an animal census every year. This concept may therefore be precisely what is needed to start a social livestock insurance program. Just as important, the insurance that is used in Mongolia should not interfere with the exceptional efforts that experienced herders take to save animals during severe weather. Using an individual insurance may, in fact, diminish these efforts. Herders may ask, "Why should I work so hard to save my animals if I will simply be compensated for those that are lost?" Since the index insurance would pay all herders in the same region the same rate, the incentives for management to mitigate livestock losses remain strong. No one would reduce their effort to collect on insurance. Those who increase their efforts during a major event (dzud) would likely be compensated for this effort even though they do not lose livestock. In some cases, they could reasonably expect to receive payments that would compensate for the added effort or the added cost of trying to save their livestock. 2014-08-13T17:13:56Z 2014-08-13T17:13:56Z 2002-09 http://documents.worldbank.org/curated/en/2002/09/2014515/examining-feasibility-livestock-insurance-mongolia http://hdl.handle.net/10986/19291 English en_US Policy Research Working Paper;No. 2886 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Mongolia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ACCOUNTING SYSTEMS ADULT MORTALITY ADVERSE SELECTION AGENTS AGRICULTURAL INSURANCE ANIMAL ANIMAL LOSSES ANIMALS APPLICATIONS ASSET DIVERSIFICATION AUDITING AUDITORS BREEDING BREEDING STOCK CAPITAL MARKETS CATTLE COMPULSORY INSURANCE COVERAGE DISASTERS ECONOMICS ECONOMIES OF SCALE FEED FEEDS FINANCIAL MARKETS FINANCIAL SECTOR FODDER FORAGE FRAUD GOATS GRAZING HERDERS HERDING HERDS HORSES INCOME INCREMENTAL COSTS INDEMNITY INSURANCE PRODUCTS INSURANCE SYSTEM INSURERS INTEGRITY LEGISLATION LIVESTOCK LIVESTOCK HERDERS LIVESTOCK INSURANCE LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS LIVESTOCK PRODUCERS LIVESTOCK PRODUCTION MORAL HAZARD MORTALITY NATURAL RESOURCES NOMADIC HERDERS POLICY MAKERS POLICY RESEARCH PRECIPITATION PREMIUMS PRIVATE BANKS PRIVATE INSURANCE PRIVATE INSURANCE COMPANIES RATES REINSURANCE REINSURANCE MARKETS RESERVES RISK MANAGEMENT RISK MITIGATION RISK SHARING SHEEP TRANSACTION COSTS UNDERWRITING WATER SUPPLY WILLINGNESS TO PAY LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS MORTALITY LEVELS INSURANCE CASUALTY ANIMAL HEALTH LIVESTOCK NUMBERS HERDERS |
| spellingShingle |
ACCOUNTING ACCOUNTING SYSTEMS ADULT MORTALITY ADVERSE SELECTION AGENTS AGRICULTURAL INSURANCE ANIMAL ANIMAL LOSSES ANIMALS APPLICATIONS ASSET DIVERSIFICATION AUDITING AUDITORS BREEDING BREEDING STOCK CAPITAL MARKETS CATTLE COMPULSORY INSURANCE COVERAGE DISASTERS ECONOMICS ECONOMIES OF SCALE FEED FEEDS FINANCIAL MARKETS FINANCIAL SECTOR FODDER FORAGE FRAUD GOATS GRAZING HERDERS HERDING HERDS HORSES INCOME INCREMENTAL COSTS INDEMNITY INSURANCE PRODUCTS INSURANCE SYSTEM INSURERS INTEGRITY LEGISLATION LIVESTOCK LIVESTOCK HERDERS LIVESTOCK INSURANCE LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS LIVESTOCK PRODUCERS LIVESTOCK PRODUCTION MORAL HAZARD MORTALITY NATURAL RESOURCES NOMADIC HERDERS POLICY MAKERS POLICY RESEARCH PRECIPITATION PREMIUMS PRIVATE BANKS PRIVATE INSURANCE PRIVATE INSURANCE COMPANIES RATES REINSURANCE REINSURANCE MARKETS RESERVES RISK MANAGEMENT RISK MITIGATION RISK SHARING SHEEP TRANSACTION COSTS UNDERWRITING WATER SUPPLY WILLINGNESS TO PAY LIVESTOCK MANAGEMENT LIVESTOCK NUMBERS MORTALITY LEVELS INSURANCE CASUALTY ANIMAL HEALTH LIVESTOCK NUMBERS HERDERS Skees, Jerry R. Enkh-Amgalan, Ayurzana Examining the Feasibility of Livestock Insurance in Mongolia |
| geographic_facet |
East Asia and Pacific Mongolia |
| relation |
Policy Research Working Paper;No. 2886 |
| description |
Herders in Mongolia have suffered
tremendous losses in recent dzud (winter disasters), with
livestock mortality rates of over 50 percent in some
locales. This study examines the feasibility of offering
insurance to compensate for animal deaths. Such an
undertaking is challenging in any country. Mongolia offers
even more challenges given the vast territory in which
herders tend over 30 million animals. Traditional approaches
that insure individual animals are simply not workable. The
opportunities for fraud and abuse are significant.
Monitoring costs required to mitigate this behavior would be
very high. This study focuses on the potential for using the
livestock mortality rate at a local level (for example, the
sum or rural district) as the basis for indemnifying
herders. Applications of index insurance are growing around
the world, although no country has so far implemented such
insurance for livestock deaths. But few countries have such
frequent and high rates of localized animal deaths as does
Mongolia, and it is one of the few countries that perform an
animal census every year. This concept may therefore be
precisely what is needed to start a social livestock
insurance program. Just as important, the insurance that is
used in Mongolia should not interfere with the exceptional
efforts that experienced herders take to save animals during
severe weather. Using an individual insurance may, in fact,
diminish these efforts. Herders may ask, "Why should I
work so hard to save my animals if I will simply be
compensated for those that are lost?" Since the index
insurance would pay all herders in the same region the same
rate, the incentives for management to mitigate livestock
losses remain strong. No one would reduce their effort to
collect on insurance. Those who increase their efforts
during a major event (dzud) would likely be compensated for
this effort even though they do not lose livestock. In some
cases, they could reasonably expect to receive payments that
would compensate for the added effort or the added cost of
trying to save their livestock. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Skees, Jerry R. Enkh-Amgalan, Ayurzana |
| author_facet |
Skees, Jerry R. Enkh-Amgalan, Ayurzana |
| author_sort |
Skees, Jerry R. |
| title |
Examining the Feasibility of Livestock Insurance in Mongolia |
| title_short |
Examining the Feasibility of Livestock Insurance in Mongolia |
| title_full |
Examining the Feasibility of Livestock Insurance in Mongolia |
| title_fullStr |
Examining the Feasibility of Livestock Insurance in Mongolia |
| title_full_unstemmed |
Examining the Feasibility of Livestock Insurance in Mongolia |
| title_sort |
examining the feasibility of livestock insurance in mongolia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2002/09/2014515/examining-feasibility-livestock-insurance-mongolia http://hdl.handle.net/10986/19291 |
| _version_ |
1764439687777222656 |