Featured case: Using Satellite Data to Insure Livestock

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The case

Who – the protagonists

Andrew Mude, Team Leader for the Index-Based Livestock Insurance Program (IBLI), developed by the International Livestock Research Institute (ILRI).


Index-based Livestock Insurance (IBLI) protects poor pastoralists in Africa against the risk posed by severe drought. By providing them with insurance, IBLI helps reduce poverty and improve food security. IBLI emerged from an ongoing research effort by ILRI, an organisation dedicated to the sustainable use of livestock.



While insurance products abound for other markets, poor pastoralists, who can often lose everything because of drought, have almost zero insurance available to them. IBLI is one of the first market-mediated index-based insurance products in the world. It was designed and implemented by ILRI and its partners to fill a vital need in the market, and to protect livestock owners from drought-related asset losses.


IBLI was first sold in Northern Keyna's Marsabit District in 2010. After a severe drought in 2011, IBLI made its first payout, which was a resounding success. 


The insurance programme was aimed at millions of poor pastoralists in Kenya and Ethiopia who often lose livestock – their primary asset – during severe droughts. It had a substantial positive impact on those who took advantage of the scheme, but uptake was lower than expected. The biggest reason for low sales initially was a change to the compensation structure for sales agents (Village Insurance Promoters). However, despite refining the programme, sales did not substantially improve.

Key quote

‘Which is the best way to expand IBLI into a sustainable, well-received product? Should the IBLI team focus on strengthening the programme in Kenya, or on expanding into new territories? Is it possible to do both successfully?’ – Andrew Mude

What next?

The goal was clear: to grow IBLI. But when and how should this growth take place? If IBLI stayed in Kenya, how could it keep donors happy and build a sustainable programme? If they moved to new countries, how could they use their insights to be successful elsewhere, while ensuring that the Kenyan and Ethiopian programmes were not adversely affected? Could they do it all, or would they have to choose? Being either overzealous or overcautious could harm IBLI. As ILRI’s senior management team gathered together to plan for 2015-2017, it was time for Andrew Mude to present a clearer, better direction for IBLI.

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Using Satellite Data to Insure Livestock: IBLI and the Development of the World’s First Insurance for African Pastoralists
Ref 315-297-1

Teaching note
Ref 315-297-8

The authors

Iddo Dror, Shreya Maheshwari and Andrew Mude

The authors explain why they’re so keen for this case – the first that ILRI has produced – to be widely used.

Research agenda

Alt textOur case was inspired by the creative thinking and problem-solving skills of the next generation of development professionals and academics.

We hope this case will spur students to think critically and creatively about challenges in international development. Our aim is to help students employ their business skills and acumen to delivering critical financial services to the last frontier of the developing world.

livestockRaising awareness

We at ILRI and the CGIAR believe this case holds many lessons for good management practices. It is pertinent to organisations in finance, development and governance. It also raises awareness about the challenges of serving those at the bottom of the pyramid and what it takes to improve the lives of over two billion smallholder farmers. We want to expose business students to those challenges in international business development that they may not typically be aware of.

Supporting faculty: free sessions

We have created a dedicated teaching website to accompany the case, with several resources to help faculty plan and teach this case with ease.

As a promotional offer, the first 25 faculty members who include this case in their curriculum in 2016 will benefit from free individual tutoring sessions with Dr Iddo Dror, the lead author of the case. He’ll offer first-hand tips on how to best use the case and tailor it to specific classes. Sessions will be conducted via Skype, and will be limited to three per month on a first-come-first-served basis. For more information contact i.dror@cgiar.org

Alt textWidely relevant

This case focuses on the challenges, pressures and opportunities involved in setting up an index-based livestock insurance (IBLI) programme in locations with large populations of poor pastoralists.

Students can learn how an insurance product serving the poor and vulnerable can become commercially sustainable. This case is likely to be a great fit with a large number of classes, including finance, international organisations, strategy, HR and marketing.

About the authors

Iddo Dror is Head of Capacity Development at the International Livestock Research Institute.
e I.Dror@cgiar.org
tw @iddodror

Shreya Maheshwari is a Case Writer and Independent Consultant  
e maheshwari.shreya@gmail.com

Andrew Mude is Principal Economist, IBLI Project Leader at the International Livestock Research Institute
e a.mude@cgiar.org
tw @agmude


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