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N YALA I NSURANCE S.C. MI in Ethiopia NYALA’s Experience 2007-2110 NISCO - pioneer in both MI products -Traditional Crop Insurance (MPCI) & WEATHER INDEX.

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Presentation on theme: "N YALA I NSURANCE S.C. MI in Ethiopia NYALA’s Experience 2007-2110 NISCO - pioneer in both MI products -Traditional Crop Insurance (MPCI) & WEATHER INDEX."— Presentation transcript:

1 N YALA I NSURANCE S.C. MI in Ethiopia NYALA’s Experience 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 st year 337, 2nd year 2044 clients… 1

2 N YALA I NSURANCE S.C. 2 Why MI? Problem Statement low income HHs had no access OR ignored by regular insurance Scheme cover for them was not a welcome idea by insurers -

3 N YALA I NSURANCE S.C. Risky Business? Insurance for low income - unsafe Low income people -high risk -Have nothing to protect -Unprofitable -Unmanageable… 3

4 N YALA I NSURANCE S.C. Insuring poor ? This is being recognized rapidly by-Government, -Donors -NGO -Private sector insurance works for poor If designed with the poor in mind 4

5 N YALA I NSURANCE S.C. Definition of MI Protection of low income people against specific peril/s in exchange for regular premium payments Proportion to the likelihood & cost of the risk Premium on: full picture of the risk 5

6 N YALA I NSURANCE S.C. MI Covers risks to RURAL & URBAN -Health -Life -disability (breadwinner) -Mainly Property like crop, livestock… 6

7 N YALA I NSURANCE S.C. 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

8 N YALA I NSURANCE S.C. 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) 8

9 N YALA I NSURANCE S.C. 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

10 N YALA I NSURANCE S.C. Indemnity based… -Submits corresponding payment -Payout on magnitude of loss -relatively accurate payouts -Others entail higher admin. Cost Eg.Motor insurance F&L insurance Multi peril crop insurance… 10

11 N YALA I NSURANCE S.C. Index Based Insurance Relatively new concept is alternative to Traditional Crop Insurance Program Financial risk transfer INDEX refers - the Insurance is based on an objectively verifiable measure 11

12 N YALA I NSURANCE S.C. 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

13 N YALA I NSURANCE S.C. Weather Index Insurance Weather is the INDEX it 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 13

14 N YALA I NSURANCE S.C. 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 - 14

15 N YALA I NSURANCE S.C. WII… Other Weather Indices -temperature, -humidity - crop yields, -flood… 15

16 N YALA I NSURANCE S.C. Cattle Insurance (Indemnity,2011) We Care We Protect16 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

17 N YALA I NSURANCE S.C. Age-group We Care We Protect17 Types of animalAge IAMilk cows(Indigenous/Cross-bred/Exotic )5-8 yrs BStud Bulls3-8 yrs CBullocks (castrated bulls)3-12 yrs IICalves Heifers >90 days >1 year

18 N YALA I NSURANCE S.C. Insurance Coverage We Care We Protect18 The policy gives indemnity for death of animals due to accident illness and disease (including epidemic diseases) smoke, fire, lightning windstorm

19 N YALA I NSURANCE S.C. Thank you for your attention Nyala Insurance S.C /180491/


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