Helping Communities Manage risks from the ground up.
Composite Microinsurance in North East India
Advisory Services + Structured Technical Assistance
Project Title:Composite Microinsurance in North East India: MRDS-LIFCOM-Meghalaya
PROJECT CATEGORY:Advisory Services + Structured Technical Assistance
OBJECTIVE:
To determine the most appropriate risk management solution for livestock-dependent communities in the Indian North East.
BACKGROUND:
Livestock is essential to the culture and livelihood of Meghalaya. It is a reliable source of supplementary income and serves as a liquid asset in times of any emergency such as crop failure, crop loss, loan repayment or unexpected fees. In addition, it is considered as a source of income generation, and is equally important in the form of household dairy and meat consumption.“Loss of Herd” is the major risk for the livestock rearing community in Meghalaya. This correlates with the findings of a baseline study conducted by MIA in June 2010, which uncovered a high rate of herd mortality due to diseases.Timely vaccinations and prevention mechanisms have not worked properly for the target community. Ensuring adoption of best practices will require high community involvement, investment in awareness, and the promotion animal health services, all at an affordable cost and available at the doorstep. The aforementioned can all be successfully integrated by a community-based livestock insurance scheme. The idea of collectively managing risk was well received by the community, which showed high preference for a village or local area-based claim settlement process. The village leaders also showed keen interest to be part of such a process. Looking into community social structure and its close-knit nature, the prospects of introducing a community-based insurance system seems promising in the local context.
PROJECT CONCEPT:
The baseline study has been conducted to assess the needs of the target communities regarding livestock and health-based microinsurance products. MIA is currently awaiting funding to begin the implementation phase. The approach thus far has been to:
- Study insurance products currently available in the target communities of MRDS / MLIPH and critically assess whether these fit with the existing needs of the communities.
- Study existing traditional risk management systems in the target communities.
- Undertake a comparative assessment of the demand and supply gap of microinsurance / risk management products in the context of MLIPH objectives - including a composite risk assessment of insurance solutions.
- Examine the feasibility of promotion of community managed insurance products.
PARTNERS:
- MRDS (Meghalaya Rural Development Society)
- MLIPH (Meghalaya Livelihood Improvement Project for the Himalayas)
FUNDING:
The baseline study was jointly funded by MRDS and the Livelihood Improvement Finance Company of Meghalaya (LIFCOM) as a part of its work with program MLIPH.
DURATION:2010-2011
COUNTRY:India
LOCATION:
- Data analysis and desk research: MIA office in New Delhi, India.
- Field work: 5 Districts in Meghalaya: East Khasi, Ri-Bhoi, Jaintia Hills, East Garo and South Garo
CONTACT:Udita Sanga, Researcher (Livestock), udita@mia.org.in
PROGRESS:
A baseline study was conducted in June 2010 to assess the potential for developing microinsurance in Meghalaya to cover both livestock and human health risks. The final report was structured to enable MRDS to look at both livestock and health insurance as complementing yet separate activities while considering the demand and supply gap of microinsurance/risk management products and insurance solutions in Meghalaya.
MIA recommended a community-based livestock insurance scheme be set up, building on the existing structures of MRDS, and targeted at plugging the gaps identified between the needs of the community and the commercial/public offer of microinsurance through close consultation with the communities.
Also, based on the gaps in risk management in human health services, MIA recommended a community-based health insurance scheme to be designed to mirror the processes applied by MRDS in its existing microfinance programs, and to develop community capacities at different levels. MIA would provide step-wise technical assistance and stewardship accomplished through a comprehensive series of local workshops with the partner organisation and local communities.
