Historical extension of operational NDVI products for livestock insurance in Kenya

Droughts induce livestock losses that severely affect Kenyan pastoralists. Recent index insurance schemes have the potential of being a viable tool for insuring pastoralists against drought-related risk. Such schemes require as input a forage scarcity (or drought) index that can be reliably updated in near real-time, and that strongly relates to livestock mortality. Generally, a long record (>25 years) of the index is needed to correctly estimate mortality risk and calculate the related insurance premium. Data from current operational satellites used for large-scale vegetation monitoring span over a maximum of 15 years, a time period that is considered insufficient for accurate premium computation. This study examines how operational NDVI datasets compare to, and could be combined with the non-operational recently constructed 30-year GIMMS AVHRR record (1981–2011) to provide a near-real time drought index with a long term archive for the arid lands of Kenya. We compared six freely available, near-real time NDVI products: five from MODIS and one from SPOT-VEGETATION. Prior to comparison, all datasets were averaged in time for the two vegetative seasons in Kenya, and aggregated spatially at the administrative division level at which the insurance is offered. The feasibility of extending the resulting aggregated drought indices back in time was assessed using jackknifed R2 statistics (leave-one-year-out) for the overlapping period 2002–2011. We found that division-specific models were more effective than a global model for linking the division-level temporal variability of the index between NDVI products. Based on our results, good scope exists for historically extending the aggregated drought index, thus providing a longer operational record for insurance purposes. We showed that this extension may have large effects on the calculated insurance premium. Finally, we discuss several possible improvements to the drought index

Determining insurable units for index-based livestock insurance in northern Kenya and southern Ethiopia

Department for International Development, United KingdomDepartment of Foreign Affairs and Trade, AustraliaWorld BankUnited States Agency for International Developmen

The potential and uptake of remote sensing in insurance: A review

Global insurance markets are vast and diverse, and may offer many opportunities for remote sensing. To date, however, few operational applications of remote sensing for insurance exist. Papers claiming potential application of remote sensing typically stress the technical possibilities, without considering its contribution to customer value for the insured or to the profitability of the insurance industry. Based on a systematic search of available literature, this review investigates the potential and actual support of remote sensing to the insurance industry. The review reveals that research on remote sensing in classical claim-based insurance described in the literature revolve around crop damage and flood and fire risk assessment. Surprisingly, the use of remote sensing in claim-based insurance appears to be instigated by government rather than the insurance industry. In contrast, insurance companies are offering various index insurance products that are based on remote sensing. For example, remotely sensed index insurance for rangelands and livestock are operational, while various applications in crop index insurance are being considered or under development. The paper discusses these differences and concludes that there is particular scope for application of remote sensing by the insurance industry in index insurance because (1) indices can be constructed that correlate well with what is insured; (2) these indices can be delivered at low cost; and (3) it opens up new markets that are not served by claim-based insurance. The paper finally suggests that limited adoption of remote sensing in insurance results from a lack of mutual understanding and calls for greater cooperation between the insurance industry and the remote sensing community

Early assessment of seasonal forage availability for mitigating the impact of drought on East African pastoralists

Author Posting.© The Author(s), 2015. This is the author's version of the work and is distributed under the terms of the Creative Commons Attribution License. The definitive version was published in Remote Sensing of Environment 174 (2016): 44-55, doi:10.1016/j.rse.2015.12.003.Pastoralist households across East Africa face major livestock losses during drought periods that can cause persistent poverty. For Kenya and southern Ethiopia, an existing index insurance scheme aims to reduce the adverse effects of such losses. The scheme insures individual households through an area-aggregated seasonal forage scarcity index derived from remotely-sensed normalized difference vegetation index (NDVI) time series. Until recently, insurance contracts covered animal losses and indemnity payouts were consequently made late in the season, based on a forage scarcity index incorporating both wet and dry season NDVI data. Season timing and duration were fixed for the whole area (March-September for long rains, October-February for short rains). Due to demand for asset protection insurance (pre-loss intervention) our aim was to identify earlier payout options by shortening the temporal integration period of the index. We used 250m-resolution 10-day NDVI composites for 2001-2014 from the Moderate Resolution Imaging Spectroradiometer (MODIS). To better describe the period during which forage develops, we first retrieved per-pixel average season start- and end-dates using a phenological model. These dates were averaged per insurance unit to obtain unit-specific growing period definitions. With these definitions a new forage scarcity index was calculated. We then examined if shortening the temporal period further could effectively predict most (>90%) of the interannual variability of the new index, and assessed the effects of shortening the period on indemnity payouts. Our analysis shows that insurance payouts could be made one to three months earlier as compared to the current index definition, depending on the insurance unit. This would allow pastoralists to use indemnity payments to protect their livestock through purchase of forage, water, or medicines.AV was funded under a contract from the International Livestock Research Institute. CCU was supported by the U.S. National Science Foundation under grant OCE-1203892.2016-12-1

Information for Meeting Africa’s Agricultural Transformation and Food Security Goals (IMAAFS)

The organizers of this international Conference on Information for Meeting Africa’s Agricultural Transformation and Food Security Goals (IMAAFS) included the African Union, the UN Economic Commission for Africa, and the European Commission (through the Joint Research Center). The Conference took place at the UN Conference Centre in Addis Ababa from 1 to 3 October 2014, to widen the availability and use of evidence-based information for agricultural growth and improved food and nutrition security. With over 180 international participants, the event brought together scientists and policy makers from a wide range of institutions and research organizations from Africa, Europe and the United States, as well as major UN agencies. The Conference took place over the course of three days and included nine presentation and discussion sessions (each with a chairperson and a rapporteur), executive morning briefs, break-out working groups, and a final decision-grid exercise to summarize the expert opinion of participants regarding the most promising strategies.JRC.H.4-Monitoring Agricultural Resource

Designing index based livestock insurance for managing asset risk in northern Kenya

This paper describes a novel effort at developing index-based insurance for locationaveraged livestock mortality as a means to fill an important void in the risk management instruments available to protect the main asset of pastoralists in the arid and semi-arid lands of Kenya, where insurance markets are effectively absent and uninsured risk exposure is a main cause of the existence of poverty traps. We describe the detailed methodology in designing such insurance contract with the underlying index uniquely constructed off explicit statistical predictions established using longitudinal observations of household-level herd mortality, fit to high quality, objectively verifiable remotely sensed vegetation data not manipulable by either party to the contract and available at low cost and in near-real time. The resulting index performs very well out of sample, both when tested against other complementing household-level herd mortality data from the same region and period and when compared qualitatively with community level drought experiences over the past 27 years. We describe contract pricing and potential risk exposures of the underwriter using a rich time series of satellite-based vegetation data available from 1982-present. And finally, implementation opportunities and challenges are discussed to spur the product’s pilot potential

Importance of Livestock Production from Grasslands for National and Local Food and Nutritional Security in Developing Countries

Grazing lands cover more than a quarter of the world’s land surface, often on land that is unsuitable for other forms of use. Despite the perception that productivity is inherently low, the contribution of grasslands in food security in developing countries is significant. However the challenges of spatial and temporal variability of primary productivity need to be managed and mobility of livestock is key to this. Appropriate land management and governance arrangements are essential for facilitating this mobility and for creating the circumstances in which technical options for reducing variability and risk in livestock keeping can be deployed and to allow more commercially-oriented systems to develop