Livestock and Aquaculture Insurance in Developing Countries

This publication is a brief introduction to the role of insurance as a risk management mechanism in livestock and aquaculture enterprises.

The paper explores some of the complexities involved in this financial mechanism for risk sharing. In order to identify the potential role for insurance, the paper discusses other risk management mechanisms:

• Policy issues;
• Financially-based mechanisms;
• Forward sale of output and other types of contractual farming arrangements.

The document further covers the following:

• Risks facing livestock and aquaculture farmers;
• Management of these risks;
• Insurance in practice;
• Insurance approaches: steps in the development process;
• Risks that may be managed, by using insurance;
• Relation of insurance with various types of enterprise;
• Insurance administration:
  • The roles of public and private sectors;
  • The overall design of policies, including the basis for valuation;
  • Marketing policies;
  • Methods of collecting premiums and paying indemnities;
  • Loss adjustment;
  • Insurance product monitoring and modification.

The paper finally states that:

• Livestock has received less attention than crop insurance in development efforts in the last few decades;
• There is need to redress the current imbalance between the attention received by aquaculture insurance, and crop insurance.