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Index-based mortality livestock insurance in Mongolia

This ‘Inside story on climate compatible development’ by the Climate and Development Knowledge Network (CDKN) explains how the Government of Mongolia’s Index-Based Livestock Insurance (IBLI) project is helping Mongolian herders cope with the harsh and unpredictable weather resulting from climate change. Index-based insurance programmes aim to make payouts based on an index of aggregated criteria, such as livestock losses over a geographic area, rather than households’ or businesses’ actual, individual losses. IBLI protects Mongolian families from significant livestock loss by providing financial security, while also encouraging herders to adopt practices that build their resilience to extreme weather events. In 2012 alone, herders bought 16,000 insurance policies. This brief demonstrates how an insurance programme such as IBLI can be used as part of a strategy to protect populations from climate-based risks.