Securing livestock livelihoods in Kyrgyzstan: Leveraging meso-level forecast index insurance solutions
The Kyrgyz Republic, a landlocked country located at the heart of Central Asia, faces increasing challenges from climate change, particularly extreme weather events such as droughts, temperature fluctuations, and reduced water availability. These challenges are severely affecting the livelihoods of rural households, especially livestock herders who rely on pasture and affordable feed to sustain their animals.
In response, the InsuResilience Solutions Fund (ISF) has signed a grant agreement to co-fund the development and implementation of a pioneering forecast-based insurance solution. This project is a collaboration between Blue Marble Microinsurance, a private InsurTech company based in London, two local insurance companies namely A PLUS and ATN Policy, and the Kyrgyz Forum of Rural Agricultural Services (KGFRAS).
Livestock farming plays a crucial role in food security and provides a safety net for vulnerable households in the Kyrgyz Republic. However, the increasing frequency of extreme weather events has made it difficult for herders to maintain adequate feed for their livestock, forcing many to sell part of their herds to cover fodder costs. A pilot study launched in 2023 revealed the shortcomings of the existing climate risk insurance product, particularly its inability to trigger payouts for the purchase of feed during drought conditions.
To address these challenges, the Project Partners are working on a forecast-based insurance approach that uses weather or climate predictions to trigger pre-arranged insurance payments. This approach aims to provide timely support before, during, or immediately after extreme weather events, specifically addressing the urgent need for livestock feed and ensuring that herders receive the assistance they need in a timely manner.
The new insurance solution will focus on providing early financing to local governments and district administrations. These funds will enable authorities to purchase fodder and other resources to protect livestock during extreme weather events. By establishing advance purchase agreements with suppliers, the forecast-based mechanism guarantees a reliable supply, even during droughts, ensuring that herders can sustain their livestock through difficult conditions.