Transcript LIVESTOCK INSURANCE MUTUAL MODEL

Indira Kranthi Patham
LIVESTOCK INSURANCE
MUTUAL MODEL
P.Chinna Thataiah, Regional Project Director,
SERP, Hyderabad.
PRELUDE
Indira Kranthi Patham
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Livestock is the most important asset for the poor
and are susceptible to different types of risks.
•
Accidental Death of animals in not uncommon.
•
The mortality among livestock is one of the
principal reasons for the loan default by the poor.
•
Livestock are subject to risk of disease and death
resulting in grievous loss in the livelihoods of the
poor in the absence of comprehensive insurance
for livestock.
Emergence of an idea
Indira Kranthi Patham
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A detailed analysis by CBOs (VO / MS / ZS) on the
disintegration of the groups revealed sudden death of milch
animal which is a major source of income resulted in fall in
income levels thereby making them to default payments.
•
To whirl this situation CBOs have demanded to put in place
a mechanism to re-create the lost asset.
•
Outcome of detailed discussions in Zilla Samakhya is to
pilot asset insurance scheme to begin with livestock and to
pilot it in one District of the State.
Vizianagaram Model in Short
Indira Kranthi Patham
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The scheme is christened as Loan
Protection
Scheme
with
an
objective to provide relief to the
SHG members who owns the Milch
Cattle (Buffalo / Cow), in the case
of death of the animals to recreate
the lost asset.
•
This is a premium based scheme with an annual premium @ 2% on
the total cost of the animal. The insurance is valid for one year.

•
100% of the cost of the animal insured will be paid to the member with in 7
working days after reporting of claim in call centre.
The scheme is totally self-managed by CBOs. Accounting, Monitoring
and Documentation systems are conceived and designed in house.
Insurance Procedure
•
Every SHG member intending to join the
scheme has to submit a written
application to the ZS through MS and VO.
•
The VO and MS need to recommend the
application.
•
The applications shall be accompanied by
an amount equivalent to 2% of the
estimated value of the animal.
•
On approval of the application Zilla
Samakhya will issue a bond.
•
Once the policy bond is provided to the
member, it is presumed that the animal is
insured from that date for a period of one
year.
Two photographs of all the animals
insured are taken & kept as record in ZS
Call Centre.
•
Indira Kranthi Patham
Submission of
application
VO / MS
recommendation Letter
Subject to:
Application being accompanied by
the above letter DD @ 2% as
entrance fee
Approval of
Zilla Samakhya
Issue of Bond
(Certificate of insurance)
Redemption of Claim
•
Upon the death of insured
animal, the information passed to
call centre (09701115588 &
09491031113) by either member
or VO or Villager.
•
Call centre directs the Bhima
Mitra to visit the Village.
•
Bhima Mitra along with the VO
conducts local enquiry, takes a
photograph of the dead animal
and submits the documents to
the LPS sub-committee in Zilla
Samakhya
along
with
recommendations of VO.
Indira Kranthi Patham
Redemption of Claim
Indira Kranthi Patham
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•
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LPS
sub-committee
will
either settle or reject the
claim based on the merit of
the documents produced
and recommendations of the
Bhima Mitra and VO.
The claim is settled to the
VO by way of cheque/DD.
The VO will settle the claim
to the member in cash /
cheque as decided by
member / SHG.
CLAIM SETTLEMENT PROCEDURE
Information to Call Centre
Inspection by Area Committee consisting of
Community Members
Submission of Application in the prescribed format
Recommendation by VO, elders of the Village
Enclosure of Photograph of the dead animal
Recommendation of Mandal Samakhya
Approval of the claim by Zilla Samakhya
Issue of Cheque / DD in favour of VO
Payment to the member by VO / OB
Performance
Indira Kranthi Patham
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The community based animal insurance scheme is
perhaps the first of its kind in the country.
• The major advantage with the scheme is that it is
community owned hence bogus claims can be
totally eliminated.
• Increase in the number of animals insured and
less number of deaths lead to an idea of reducing
the premium. (premium reduced from 4% to 2%)
•
Zilla Samakhyas aim is not to earn money but to
mitigate the risk.
•
The claim settlement process is very simple and
time bound.
Performance
Indira Kranthi Patham
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Claim settlement is within 7 days. No Postmartum,
No death certificate required from AH Department.
Simple certificate by VO, Verification by MS / ZS
Bhima Mitras and a photograph of dead animal
taken by Bhima Mitra is what all required.
•
The simplicity of the scheme lies in the fact of
intimation of the claim just by a phone call to the
call centre. The rest including documentation,
photography and Processing of Settlement etc., is
all done by the bhima mitras at no cost to the
member who never moves out of the village at
either enrolment or settlement of claim stage.
Performance
Indira Kranthi Patham
100000
90035
80000
48675
60000
40000
3519
4756
20000
327
120
88
100
0
2006
2007
2008
Enrolment
Enrollment
Claims Received
% of Claims
2006
3519
88
2.50
2009
Settled
2007 2008 2009-10
5112 48719 90035
120
327
100
2.35
0.67
0.11
DEATHS
Indira Kranthi Patham

Experience of Vizianagaram ZS with Loan Protection
Scheme has successfully demonstrated that CBOs can run
livestock insurance schemes on a fairly large scale.
SL
NO
Cause of death
CLAIMS
2006
CLAIMS
2007
CLAIMS
2008
CLAIMS
2009
1
Acute Timpanists
43
52
152
21
2
Hemorrhagic Septicemia
12
18
57
12
3
Trypanosomiasis
9
5
21
18
4
Food & Mouth Disease
7
13
22
10
5
Food & Poisoning
5
8
25
15
6
Milk Fever
1
3
18
14
7
Black Quarter
3
9
23
8
8
Snake Bite
8
12
09
2
88
120
327
100
TOTAL
LEARNINGS
Indira Kranthi Patham
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Zilla Samakhya is now the largest agency with 90,035 animals in its
clientage which is much more than all the insurance companies in
Vizianagaram put together.
•
It is essential to keep the cost of overheads as well as running
expenditure at the minimum, to ensure the sustainability of the scheme.
The success of the scheme lies in its simplicity and time boundness in
settlement of claim.
•
•
The success of the scheme critically hinges on the ability of the CBOs to
check bogus claims. The community supervision and vigilance that was
found to be very effective should be nurtured further.
•
An important precondition for the success of the scheme is its ability to
negotiate a re-insurance with any company in the market. Re-insurance
minimises the total liability on the ZS and distributes the risk port folio.
However, economics of re-insurance needs to be worked out carefully.
United India Insurance Company came down from 4% to 2% + TAX,
keeping in view the experience of Vizianagaram district and also agreed
to honour all claims settled by Zilla Samakhya without any fine print.
Indira Kranthi Patham
Traditional Insurance
Our Insurance

Claim settlement
process
•
Very rigid
•
Flexible & Community Friendly.

Claim settlement
period
•
30 – 60 Days
•
7 days

Postmortem
•
Required
•
Not required

Conditions
•
Person has to physically carry
animal to the nearest hospital
Postmortem.
Preserve the dead animal
postmortem if in case of
continuous holidays.
the
for
•
Not required
for
2-3
•
Not required
Physically inform the Insurance
Company & Physically follow it up till
the settlement is over.
•
Just leave a message in the call
centre
rest
all
including
documentation & handing over the
cheque is taken care by Bhima
Mitras.
•

Documentation
•
Lot of money
saved,
Time
saved
and
Hardship saved
Road ahead
Indira Kranthi Patham
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During the current year, in
Vizianagaram, Cattle insurance
scaled-up in 6 more Districts.
•
By 2010 around 6.00 million SHG women shall
be covered under loan / Credit Insurance.
•
By 2011 Cattle insurance will be universalized
to all the Districts in Andhra Pradesh State
covering around 10 million CATTLES.
addition to
shall
be
Road ahead
Indira Kranthi Patham
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The main aim of Zilla Samakhya in running this scheme
is to mitigate the risk.
•
Zilla Samakhya in convergence with Animal Husbandry
Department has prevented large number of deaths
since last year by pressing in services of qualified
veterinary doctors to attend to animal emergences.
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All the animals insured with Zilla Samakhya have been
vaccinated for Foot & Mouth decease, Black Quarter,
Haemorrhagis septicaemia and Antrax by Animal
Husbandry Department meaning there is special
medical attention for each and every animal.
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Result – Sizeable decreases in deaths.
Technologies
Indira Kranthi Patham
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Since the scheme is on to huge expansion as
part of replication it is decided to bring in State of the - art technology to keep up the pace of
settlement of claims.
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Various technology
consideration.
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Talks are on with technology providers.
options
are
under
Thanks for your patience
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