Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia

This paper describes the index-based livestock insurance program in Mongolia designed in the context of a World Bank lending operation with Government of Mongolia and implemented on a pilot basis in 2005. This program involves a combination of sel...

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Bibliographic Details
Main Authors: Mahul, Olivier, Skees, Jerry
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
ERL
TAX
Online Access:http://documents.worldbank.org/curated/en/2007/08/8115181/managing-agricultural-risk-country-level-case-index-based-livestock-insurance-mongolia
http://hdl.handle.net/10986/7273
id okr-10986-7273
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCIDENT
ACCOUNTING
ADMINISTRATIVE COSTS
AGENTS
AGRICULTURAL INSURANCE
AGRICULTURAL PRODUCTION
ATTACHMENT POINT
BANK LENDING
BANK POLICY
BANKS
BASIS RISK
CAPITAL GAINS
CAPITAL INVESTMENT
CAPITAL MARKETS
CAPITAL REQUIREMENTS
CAPITALIZATION
CATASTROPHE BONDS
CATASTROPHES
CATASTROPHIC EVENTS
CATASTROPHIC INSURANCE
CATASTROPHIC LOSS
CATASTROPHIC LOSSES
CATASTROPHIC RISKS
COINSURANCE
COLLECTIVE ACTION
COLLECTIVE ACTION PROBLEM
COMPETITIVENESS
COMPULSORY INSURANCE
CONDITIONS OF COVERAGE
CONSUMERS
CONTINGENT DEBT
CONTINGENT LIABILITIES
CORPORATE INVESTMENT
COUNTRY RISK
CREDIBILITY
CROP INSURANCE
CROP INSURANCE SCHEME
DAMAGES
DEATH RATES
DEBT BURDEN
DEFAULT RISK
DEPOSIT
DEVELOPING COUNTRIES
DISASTER
DISASTER AID
DISASTER ASSISTANCE
DISASTER EMERGENCY
DISASTER RECONSTRUCTION
DISASTER REHABILITATION
DISASTER RELIEF
DISASTER RESPONSE
DISASTER RISK
DISASTERS
DISBURSEMENT
DIVERSIFIED PORTFOLIO
DROUGHT
DROUGHTS
DUE DILIGENCE
EARTHQUAKE
EARTHQUAKE INSURANCE
EARTHQUAKES
EMERGENCY RELIEF
EQUIPMENT
ERL
EXCESS OF LOSS REINSURANCE
EXPENDITURES
EXTREME EVENTS
FAIR PRICE
FARMER
FARMERS
FINANCIAL EXPOSURE
FINANCIAL INTERMEDIARIES
FINANCIAL MARKETS
FINANCIAL SERVICES
FINANCIAL SUPPORT
FISCAL BURDEN
FISCAL CONSTRAINTS
FLOODS
FOOD SECURITY
FRAUD
GOVERNMENT SUPPORTS
GRACE PERIOD
HEALTH INSURANCE
HOUSING
INDEMNITIES
INDEMNITY
INDEMNITY PAYMENTS
INFORMAL LENDERS
INFRASTRUCTURE LOANS
INSURANCE
INSURANCE AGENTS
INSURANCE CLAIMS
INSURANCE COMPANIES
INSURANCE COMPANY
INSURANCE CONTRACTS
INSURANCE COVERAGE
INSURANCE FUNDS
INSURANCE INDUSTRY
INSURANCE LAW
INSURANCE MARKET
INSURANCE PENETRATION
INSURANCE POLICIES
INSURANCE POLICY
INSURANCE POOLS
INSURANCE PREMIUM
INSURANCE PREMIUMS
INSURANCE PRODUCT
INSURANCE PRODUCTS
INSURED LOSSES
INSURER
INSURERS
INTEGRITY
INTEREST RATES
INTERNATIONAL AGENCIES
INTERNATIONAL BANK
INTERNATIONAL DEVELOPMENT
INVESTMENT DECISIONS
LAWS
LEGAL ENVIRONMENT
LENDING INSTRUMENTS
LIABILITY
LIABILITY INSURANCE
LINE OF CREDIT
LIQUIDITY
LOAN
LOAN TERMS
LOCAL GOVERNMENT
LOSS RATIO
MARKET SHARE
MARKET SHARES
MICRO FINANCE
MICROFINANCE
MITIGATION
MITIGATION MEASURES
MORAL HAZARD
MORAL HAZARDS
MULTILATERAL DEVELOPMENT BANKS
NATURAL DISASTERS
NATURAL HAZARDS
NON-LIFE INSURANCE
OPERATING COSTS
OPPORTUNITY COSTS
PLEDGES
POOR FARMERS
PORTFOLIO REINSURANCE
PREMIUM PAYMENTS
PREMIUMS
PRIVATE CAPITAL
PRIVATE INSURANCE
PRIVATIZATION
PROFITABILITY
PROGRAMS
PROPERTY INSURANCE
PUBLIC INSURANCE
PUBLIC INVESTMENT
PUBLIC SAFETY
REINSURANCE AGREEMENT
REINSURANCE CAPACITY
REINSURANCE COMPANIES
REINSURANCE CONTRACT
REINSURANCE MARKETS
REINSURANCE PREMIUMS
REINSURANCE TREATY
REINSURER
REINSURERS
RELIEF
RESERVE
RESERVE FUND
RESERVE FUNDS
RESERVES
RESOURCE ALLOCATION
RETURN
RISK ANALYSIS
RISK ASSESSMENT
RISK CAPITAL
RISK EXPOSURE
RISK EXPOSURES
RISK MANAGEMENT
RISK MANAGEMENT MODEL
RISK MANAGEMENT STRATEGIES
RISK MITIGATION
RISK NEUTRAL
RISK PROFILE
RISK PROFILES
RISK SHARING
RISK TRANSFER
RURAL FINANCE
RURAL FINANCE SECTOR
SAFETY
SAFETY NET
SAFETY NETS
SAVINGS
SETTLEMENT
SOCIAL SAFETY NETS
SOLVENCY
STOP LOSS REINSURANCE
SUPERVISORY AGENCY
SUPERVISORY FRAMEWORK
SUSTAINABILITY
TAX
TAXATION
TECHNICAL ASSISTANCE
TIMELY PAYMENT
TRANSACTION
TRANSACTION COSTS
TRANSPARENCY
UNDERWRITING
WEATHER EVENTS
spellingShingle ACCIDENT
ACCOUNTING
ADMINISTRATIVE COSTS
AGENTS
AGRICULTURAL INSURANCE
AGRICULTURAL PRODUCTION
ATTACHMENT POINT
BANK LENDING
BANK POLICY
BANKS
BASIS RISK
CAPITAL GAINS
CAPITAL INVESTMENT
CAPITAL MARKETS
CAPITAL REQUIREMENTS
CAPITALIZATION
CATASTROPHE BONDS
CATASTROPHES
CATASTROPHIC EVENTS
CATASTROPHIC INSURANCE
CATASTROPHIC LOSS
CATASTROPHIC LOSSES
CATASTROPHIC RISKS
COINSURANCE
COLLECTIVE ACTION
COLLECTIVE ACTION PROBLEM
COMPETITIVENESS
COMPULSORY INSURANCE
CONDITIONS OF COVERAGE
CONSUMERS
CONTINGENT DEBT
CONTINGENT LIABILITIES
CORPORATE INVESTMENT
COUNTRY RISK
CREDIBILITY
CROP INSURANCE
CROP INSURANCE SCHEME
DAMAGES
DEATH RATES
DEBT BURDEN
DEFAULT RISK
DEPOSIT
DEVELOPING COUNTRIES
DISASTER
DISASTER AID
DISASTER ASSISTANCE
DISASTER EMERGENCY
DISASTER RECONSTRUCTION
DISASTER REHABILITATION
DISASTER RELIEF
DISASTER RESPONSE
DISASTER RISK
DISASTERS
DISBURSEMENT
DIVERSIFIED PORTFOLIO
DROUGHT
DROUGHTS
DUE DILIGENCE
EARTHQUAKE
EARTHQUAKE INSURANCE
EARTHQUAKES
EMERGENCY RELIEF
EQUIPMENT
ERL
EXCESS OF LOSS REINSURANCE
EXPENDITURES
EXTREME EVENTS
FAIR PRICE
FARMER
FARMERS
FINANCIAL EXPOSURE
FINANCIAL INTERMEDIARIES
FINANCIAL MARKETS
FINANCIAL SERVICES
FINANCIAL SUPPORT
FISCAL BURDEN
FISCAL CONSTRAINTS
FLOODS
FOOD SECURITY
FRAUD
GOVERNMENT SUPPORTS
GRACE PERIOD
HEALTH INSURANCE
HOUSING
INDEMNITIES
INDEMNITY
INDEMNITY PAYMENTS
INFORMAL LENDERS
INFRASTRUCTURE LOANS
INSURANCE
INSURANCE AGENTS
INSURANCE CLAIMS
INSURANCE COMPANIES
INSURANCE COMPANY
INSURANCE CONTRACTS
INSURANCE COVERAGE
INSURANCE FUNDS
INSURANCE INDUSTRY
INSURANCE LAW
INSURANCE MARKET
INSURANCE PENETRATION
INSURANCE POLICIES
INSURANCE POLICY
INSURANCE POOLS
INSURANCE PREMIUM
INSURANCE PREMIUMS
INSURANCE PRODUCT
INSURANCE PRODUCTS
INSURED LOSSES
INSURER
INSURERS
INTEGRITY
INTEREST RATES
INTERNATIONAL AGENCIES
INTERNATIONAL BANK
INTERNATIONAL DEVELOPMENT
INVESTMENT DECISIONS
LAWS
LEGAL ENVIRONMENT
LENDING INSTRUMENTS
LIABILITY
LIABILITY INSURANCE
LINE OF CREDIT
LIQUIDITY
LOAN
LOAN TERMS
LOCAL GOVERNMENT
LOSS RATIO
MARKET SHARE
MARKET SHARES
MICRO FINANCE
MICROFINANCE
MITIGATION
MITIGATION MEASURES
MORAL HAZARD
MORAL HAZARDS
MULTILATERAL DEVELOPMENT BANKS
NATURAL DISASTERS
NATURAL HAZARDS
NON-LIFE INSURANCE
OPERATING COSTS
OPPORTUNITY COSTS
PLEDGES
POOR FARMERS
PORTFOLIO REINSURANCE
PREMIUM PAYMENTS
PREMIUMS
PRIVATE CAPITAL
PRIVATE INSURANCE
PRIVATIZATION
PROFITABILITY
PROGRAMS
PROPERTY INSURANCE
PUBLIC INSURANCE
PUBLIC INVESTMENT
PUBLIC SAFETY
REINSURANCE AGREEMENT
REINSURANCE CAPACITY
REINSURANCE COMPANIES
REINSURANCE CONTRACT
REINSURANCE MARKETS
REINSURANCE PREMIUMS
REINSURANCE TREATY
REINSURER
REINSURERS
RELIEF
RESERVE
RESERVE FUND
RESERVE FUNDS
RESERVES
RESOURCE ALLOCATION
RETURN
RISK ANALYSIS
RISK ASSESSMENT
RISK CAPITAL
RISK EXPOSURE
RISK EXPOSURES
RISK MANAGEMENT
RISK MANAGEMENT MODEL
RISK MANAGEMENT STRATEGIES
RISK MITIGATION
RISK NEUTRAL
RISK PROFILE
RISK PROFILES
RISK SHARING
RISK TRANSFER
RURAL FINANCE
RURAL FINANCE SECTOR
SAFETY
SAFETY NET
SAFETY NETS
SAVINGS
SETTLEMENT
SOCIAL SAFETY NETS
SOLVENCY
STOP LOSS REINSURANCE
SUPERVISORY AGENCY
SUPERVISORY FRAMEWORK
SUSTAINABILITY
TAX
TAXATION
TECHNICAL ASSISTANCE
TIMELY PAYMENT
TRANSACTION
TRANSACTION COSTS
TRANSPARENCY
UNDERWRITING
WEATHER EVENTS
Mahul, Olivier
Skees, Jerry
Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
geographic_facet East Asia and Pacific
Mongolia
relation Policy Research Working Paper; No. 4325
description This paper describes the index-based livestock insurance program in Mongolia designed in the context of a World Bank lending operation with Government of Mongolia and implemented on a pilot basis in 2005. This program involves a combination of self-insurance by herders, market-based insurance, and social insurance. Herders retain small losses, larger losses are transferred to the private insurance industry, and extreme or catastrophic losses are transferred to the government using a public safety net program. A syndicate pooling arrangement protects participating insurance companies against excessive insured losses, with excess of loss reinsurance provided by the government. The fiscal exposure of Government of Mongolia toward the most extreme losses is protected with a contingent credit facility. The insurance program relies on a mortality rate index by species in each local region. The index provides strong incentives to individual herders to continue to manage their herds so as to minimize the impacts of major livestock mortality events; individual herders receive an insurance payout based on the local mortality, irrespective of their individual losses. This project offered the first opportunity to design and implement an agriculture insurance program using a country-wide agricultural risk management approach. During the first sales season, 7 percent of the herders in the three pilot regions purchased the insurance product.
format Publications & Research :: Policy Research Working Paper
author Mahul, Olivier
Skees, Jerry
author_facet Mahul, Olivier
Skees, Jerry
author_sort Mahul, Olivier
title Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
title_short Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
title_full Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
title_fullStr Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
title_full_unstemmed Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia
title_sort managing agricultural risk at the country level : the case of index-based livestock insurance in mongolia
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2007/08/8115181/managing-agricultural-risk-country-level-case-index-based-livestock-insurance-mongolia
http://hdl.handle.net/10986/7273
_version_ 1764402230074540032
spelling okr-10986-72732021-04-23T14:02:34Z Managing Agricultural Risk at the Country Level : The Case of Index-Based Livestock Insurance in Mongolia Mahul, Olivier Skees, Jerry ACCIDENT ACCOUNTING ADMINISTRATIVE COSTS AGENTS AGRICULTURAL INSURANCE AGRICULTURAL PRODUCTION ATTACHMENT POINT BANK LENDING BANK POLICY BANKS BASIS RISK CAPITAL GAINS CAPITAL INVESTMENT CAPITAL MARKETS CAPITAL REQUIREMENTS CAPITALIZATION CATASTROPHE BONDS CATASTROPHES CATASTROPHIC EVENTS CATASTROPHIC INSURANCE CATASTROPHIC LOSS CATASTROPHIC LOSSES CATASTROPHIC RISKS COINSURANCE COLLECTIVE ACTION COLLECTIVE ACTION PROBLEM COMPETITIVENESS COMPULSORY INSURANCE CONDITIONS OF COVERAGE CONSUMERS CONTINGENT DEBT CONTINGENT LIABILITIES CORPORATE INVESTMENT COUNTRY RISK CREDIBILITY CROP INSURANCE CROP INSURANCE SCHEME DAMAGES DEATH RATES DEBT BURDEN DEFAULT RISK DEPOSIT DEVELOPING COUNTRIES DISASTER DISASTER AID DISASTER ASSISTANCE DISASTER EMERGENCY DISASTER RECONSTRUCTION DISASTER REHABILITATION DISASTER RELIEF DISASTER RESPONSE DISASTER RISK DISASTERS DISBURSEMENT DIVERSIFIED PORTFOLIO DROUGHT DROUGHTS DUE DILIGENCE EARTHQUAKE EARTHQUAKE INSURANCE EARTHQUAKES EMERGENCY RELIEF EQUIPMENT ERL EXCESS OF LOSS REINSURANCE EXPENDITURES EXTREME EVENTS FAIR PRICE FARMER FARMERS FINANCIAL EXPOSURE FINANCIAL INTERMEDIARIES FINANCIAL MARKETS FINANCIAL SERVICES FINANCIAL SUPPORT FISCAL BURDEN FISCAL CONSTRAINTS FLOODS FOOD SECURITY FRAUD GOVERNMENT SUPPORTS GRACE PERIOD HEALTH INSURANCE HOUSING INDEMNITIES INDEMNITY INDEMNITY PAYMENTS INFORMAL LENDERS INFRASTRUCTURE LOANS INSURANCE INSURANCE AGENTS INSURANCE CLAIMS INSURANCE COMPANIES INSURANCE COMPANY INSURANCE CONTRACTS INSURANCE COVERAGE INSURANCE FUNDS INSURANCE INDUSTRY INSURANCE LAW INSURANCE MARKET INSURANCE PENETRATION INSURANCE POLICIES INSURANCE POLICY INSURANCE POOLS INSURANCE PREMIUM INSURANCE PREMIUMS INSURANCE PRODUCT INSURANCE PRODUCTS INSURED LOSSES INSURER INSURERS INTEGRITY INTEREST RATES INTERNATIONAL AGENCIES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT DECISIONS LAWS LEGAL ENVIRONMENT LENDING INSTRUMENTS LIABILITY LIABILITY INSURANCE LINE OF CREDIT LIQUIDITY LOAN LOAN TERMS LOCAL GOVERNMENT LOSS RATIO MARKET SHARE MARKET SHARES MICRO FINANCE MICROFINANCE MITIGATION MITIGATION MEASURES MORAL HAZARD MORAL HAZARDS MULTILATERAL DEVELOPMENT BANKS NATURAL DISASTERS NATURAL HAZARDS NON-LIFE INSURANCE OPERATING COSTS OPPORTUNITY COSTS PLEDGES POOR FARMERS PORTFOLIO REINSURANCE PREMIUM PAYMENTS PREMIUMS PRIVATE CAPITAL PRIVATE INSURANCE PRIVATIZATION PROFITABILITY PROGRAMS PROPERTY INSURANCE PUBLIC INSURANCE PUBLIC INVESTMENT PUBLIC SAFETY REINSURANCE AGREEMENT REINSURANCE CAPACITY REINSURANCE COMPANIES REINSURANCE CONTRACT REINSURANCE MARKETS REINSURANCE PREMIUMS REINSURANCE TREATY REINSURER REINSURERS RELIEF RESERVE RESERVE FUND RESERVE FUNDS RESERVES RESOURCE ALLOCATION RETURN RISK ANALYSIS RISK ASSESSMENT RISK CAPITAL RISK EXPOSURE RISK EXPOSURES RISK MANAGEMENT RISK MANAGEMENT MODEL RISK MANAGEMENT STRATEGIES RISK MITIGATION RISK NEUTRAL RISK PROFILE RISK PROFILES RISK SHARING RISK TRANSFER RURAL FINANCE RURAL FINANCE SECTOR SAFETY SAFETY NET SAFETY NETS SAVINGS SETTLEMENT SOCIAL SAFETY NETS SOLVENCY STOP LOSS REINSURANCE SUPERVISORY AGENCY SUPERVISORY FRAMEWORK SUSTAINABILITY TAX TAXATION TECHNICAL ASSISTANCE TIMELY PAYMENT TRANSACTION TRANSACTION COSTS TRANSPARENCY UNDERWRITING WEATHER EVENTS This paper describes the index-based livestock insurance program in Mongolia designed in the context of a World Bank lending operation with Government of Mongolia and implemented on a pilot basis in 2005. This program involves a combination of self-insurance by herders, market-based insurance, and social insurance. Herders retain small losses, larger losses are transferred to the private insurance industry, and extreme or catastrophic losses are transferred to the government using a public safety net program. A syndicate pooling arrangement protects participating insurance companies against excessive insured losses, with excess of loss reinsurance provided by the government. The fiscal exposure of Government of Mongolia toward the most extreme losses is protected with a contingent credit facility. The insurance program relies on a mortality rate index by species in each local region. The index provides strong incentives to individual herders to continue to manage their herds so as to minimize the impacts of major livestock mortality events; individual herders receive an insurance payout based on the local mortality, irrespective of their individual losses. This project offered the first opportunity to design and implement an agriculture insurance program using a country-wide agricultural risk management approach. During the first sales season, 7 percent of the herders in the three pilot regions purchased the insurance product. 2012-06-06T16:23:44Z 2012-06-06T16:23:44Z 2007-08 http://documents.worldbank.org/curated/en/2007/08/8115181/managing-agricultural-risk-country-level-case-index-based-livestock-insurance-mongolia http://hdl.handle.net/10986/7273 English Policy Research Working Paper; No. 4325 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Mongolia