National Agriculture Insurance Scheme (NAIS): Livestock Insurance Phase I

1. National Agriculture (crop and livestock) Insurance Scheme (NAIS) 19th April 2014 I Kigali, Rwanda

2. Objective – National Agriculture Insurance Scheme (NAIS*) At the scheme design level the following objectives should be met • To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop and livestock as a result of natural calamities, pests and diseases • To improve access to financial (lending) institutions and ensure flow of credit to the agriculture sector and thereby encouraging farmer to adopt innovative and modern agricultural practices

3. Cont’ • To allow banks to expand their lending portfolio to agriculture sector without increasing default risk • To make effective use of Government subsidies • To provide standard insurance contracts and lay down procedures and principles for the operation of agriculture insurance, to ensure centralized and standardized loss adjustment activities

4. Implementation Framework - (Input Linkage Model)

5. Common causes of agro losses and its prevalence Production Risks (Weather & Pest) Note: The side study covered 9 districts in 5 provinces of Rwanda, 10 FGDs were conducted with a total of 125+ farmers (30% women) practicing 11 different agricultural activities

6. Proposed Insurance Program • Public-private partnerships (PPP) can create an environment that is more conducive to agricultural insurance. The essential pillars and achievements of this PPP model include: • Public co-financing of premiums and catastrophe losses • Setting insurance enabling uniform terms and conditions • Efficient, transparent and uniform settlement of claims Government Co-financing of premiums Reinsurance Insurance Companies Insurance Pool/ Board Reinsurance Companies Reinsurance Sales & Premium Agro dealers / Banks / MFIs/ SACCOs • Rwanda Agriculture Insurance Pool / Board within the Ministry in charge of Insurance, will support the design and implementation of both crops and livestock insurance activities Loss Settlement Farmers

7. Rationale - Single company versus pool coinsurance Government Co-financing of premiums Reinsurance Insurance Companies Insurance Pool/ Board Reinsurance Companies Reinsurance Sales & Premium Farmers Loss Settlement Agro dealers / Banks / MFIs/ SACCOs

8. Cont’ • Economies of scale; initial program cost (e.g. consumer education, setting up process, operating systems) are either taken up by the Govt. or shared amongst the coinsurers likely to be more sustainable • The ability for the pool coinsurers to retain a much higher level of risk than if one company is appointed to underwrite the business • The ability to purchase common account reinsurance protection leading to major cost savings in the reinsurance program through risk pooling/risk diversification

9. Product Specifications Livestock Insurance Crop Insurance *MPCI – Multi Peril Crop Insurance

10. National Agriculture Insurance Scheme (NAIS) – Livestock Insurance (Phase - I) Tentative Launch Date – June 2018

11. Product Specifications • Product • Insurance to cover livestock mortality Purpose / Objective • To provide a safety net for the “Dairy Cooperative” members and individual farmers against death of animals due to any reason. The Policy covers indigenous, crossbred and exotic cattle. Policy Benefits / Product Coverage • The Insurance Company will indemnify the Insured for accidental death or death of the livestock due to • lightning, injury, fire, windstorm, snake bites, flooding, landslide • Illness and diseases of terminal nature • epidemics and emergency slaughter on a Vets advice

12. Cont; Eligibility • Calves (heifers and bulls) above 90 days and up to 1-year old • Heifers not inseminated above 1 year and up to 2 years old • Heifers pregnant, milking cows above 2 year and up to 8 years old Policy Period / Tenure • One year policy Sum Insured / Benefit Amount • An animal will be insured for its current market price. The market price of the animal to be insured will be assessed and agreed jointly by the beneficiary, authorized veterinary doctor and Insurer

13. Advantages – RFID* technology • On the spot cover issued in real time, which means the farmers gets cover on his cattle the very minute he pays the premium • Less premium rate is charged because the transaction costs are kept in check, and through the integration of RFID technology platform, information of each livestock is centrally monitored • Unique individual identifier - enables fast and error free recording of tag numbers and immediate recording of cattle details in electronic form

14. Cont’ • Store more information - same tag may be used for multiple uses like for healthcare data recording, breeding data recording and other requirements for the same animal Fast-track settlement of claims - Accurate traceability for animal disease management eliminates never - ending paperwork and allows farmers to have accurate livestock data on hand

15. Cont’ • Holds a small amount of unique data – a serial number or other unique attribute of the cattle • The data can be read from a distance – no contact or even line of sight necessary

16. Possible Impact through Livestock Insurance • Improve the livelihoods (notably cash incomes, food security, nutrition, resilience to shocks) of beneficiaries • Strengthen the dairy co-operatives in the district to support value chain improvements and the inclusion of improved breeds and other dairy farming inputs and equipment’s • Increase access to financial institutions and credit in the livestock space • Create employment/ self employment at farm level as well as in the rest of the dairy value chain • Increased access to health care facilities (e.g. vaccination) and improved animal health

17. Thank You