It is generally accepted that climate trends are changing, leading to more volatile and extreme weather events. For vulnerable communities, changes in climate trends pose a substantial threat to their financial and physical well-being. Extreme heat or cold can ruin a harvest. Excessive rainfall can create breeding grounds for mosquitoes that spread malaria. Floods can wipe out livestock, crops and personal property. The vulnerable have limited mechanisms to cope with changing climate conditions and the subsequent financial implications of crop failures, loss of livestock or health events.
The main objective of the multi-year RES-RISK project is to enhance the resilience of vulnerable communities to climate change by developing and implementing pro-poor microinsurance solutions covering health, crop and livestock risks in two locations lying in different agro-climatic zones: (i) the Middle Gangetic Plains region, with activities in North Bihar; namely Vaishali and Muzaffarpur, and (ii) the West Coast Plains & Hills region of Beed, in Maharashtra.
MIA (lead) and BASIX (co-implementing partner), through funding from the Climate Change and Development Division of the Embassy of Switzerland in New Delhi, are pioneering an innovation in microinsurance to directly meet the needs of vulnerable communities impacted by climate change. We are developing composite insurance – which combines coverage for health, crop, livestock and natural disaster – and using our community-based insurance model to help communities set up and govern their own schemes. Through this project, communities will be able to manage the range of risks associated with changes in climate trends.
The RES-RISK project is being implemented through partnerships with local NGOs, namely VASFA and NIDAN in Vaishali, Meenapur SHG Federation in Muzaffarpur and JVSS in Beed.
In 2013, MIA and our partners have conducted more than 4,200 household interviews, 50 focus group discussions (FGDs) and 50 key informant interviews as part of this project in Bihar and Maharashtra. In 2015 another 3,000 households have been interviewed and16 FGDs and 49 KIIs have been conducted.
Extensive quantitative, qualitative and spatial data has been collected on socio-economics, agricultural activities, livestock rearing, health related issues, perception on climate change, financial coping mechanisms and local hazards. Primary data has been complemented by climate data procured from the Indian Meteorological Department (IMD) and satellite data. Using the collected data, benefit options for schemes that cover various climate-related risks have been designed and priced. Various research studies on climate change impact on groundwater availability for domestic use and climate impact on agricultural risks have been conducted. Insurance awareness tools have been designed, awareness campaigns conducted and a local ground structure to administer the insurance schemes are being established. In the next phase of the project, communities will select an appropriate insurance package and begin enrolling households into schemes.
The risk transfer measures are being embedded into a comprehensive adaptation framework. As a first layer adaptation measures for risk reduction (e.g. agriculture value chain services) have the potential to address the larger portion of the risk cost efficiently. By reducing the risk, other financial solutions like risk transfer become affordable. The residual risk, which cannot be transferred cost efficiently, has to be taken prudently. Agriculture value chain benefits could cover dissemination of better agricultural practices to farmers, access to quality seeds and fertilizers, watershed management practices, agro-met services and better access to markets etc.
Since July 2015, in Vaishali district, Bihar, 3,311 individuals have been covered by health insurance, from which 75 have additionally availed livestock and 232 crop insurance. MIA pioneered a composite risk, multiple underwriting models: The health risks are fully mutualized and covered by the community, the crop risks are fully underwritten through group (not individual) polices by a commercial insurer, and livestock risks are covered through a combination of mutual-aid and commercial underwriting. The community decided on the risk coverage and is responsible for enrollment and awareness creation as well as settlement to the individual members.
The cumulative enrollment figure is 6,973 individuals (Vaishali: 2014/15 for Hajipur and Bidupur blocks and 2015/16 for Hajipur, Bidupur and Vaishali blocks).
The preparation of the launch of the schemes in Muzaffarpur district, Bihar, and Beed district, Maharashtra, is ongoing.