Index-Based Mortality Livestock Insurance in Mongolia

The Index-Based Livestock Insurance (IBLI) project in Mongolia provides financial security to herders by triggering payouts based on aggregated livestock mortality rates rather than individual losses. This mechanism addresses the challenges of traditional insurance in sparsely populated areas and helps protect the livestock sector, which accounts for roughly 80% of the value added in Mongolia's agriculture sector. The program is designed as part of a broader risk management strategy to encourage sustainable grazing and adaptation to climate change, which has increased the intensity of droughts and dzuds.

• The IBLI project utilizes an index-based system where payouts are triggered by aggregated criteria, such as livestock losses across a geographic area, rather than individual household losses, which reduces transaction costs and avoids moral hazard.
• Climate change has increased the frequency and intensity of extreme weather in Mongolia, including dzuds (combined drought, heavy snowfall, extreme cold, and windstorms), with temperatures rising nearly two degrees Celsius over the last 50 years.
• The economic impact of climate-related livestock loss is severe; between 2000 and 2002, over 11 million animals died, resulting in losses exceeding US$200 million and contributing to a poverty rate increase from approximately 30% in 2000 to over 40% in 2004.
• The IBLI program has seen significant uptake and delivery, with 16,000 policies purchased in 2012 and 100% of qualified herders receiving payments after the devastating dzuds of 2009 to 2010.
• For index-based insurance to be sustainable and effective, it requires high-quality mortality data, affordability for herders, and a cost-effective administrative infrastructure to keep premiums low.
• The Mongolian government integrates IBLI into a comprehensive risk management strategy that includes promoting sustainable grazing, introducing climate-resilient animal breeds, and improving veterinary services to reduce overall vulnerability.

APA

Climate and Development Knowledge Network (n.d.). Index-Based Mortality Livestock Insurance in Mongolia. https://cdkn.org/story/inside-story-index-based-mortality-livestock-insurance-in-mongolia

Chicago

Climate and Development Knowledge Network. Index-Based Mortality Livestock Insurance in Mongolia. n.d. https://cdkn.org/story/inside-story-index-based-mortality-livestock-insurance-in-mongolia.

Wikipedia

{{cite report |author=Climate and Development Knowledge Network |title=Index-Based Mortality Livestock Insurance in Mongolia |url=https://cdkn.org/story/inside-story-index-based-mortality-livestock-insurance-in-mongolia |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climateanddevelopmentknowledgenetworkndindexbased, author = {{Climate and Development Knowledge Network}}, title = {{Index-Based Mortality Livestock Insurance in Mongolia}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/story/inside-story-index-based-mortality-livestock-insurance-in-mongolia}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }