Index-Based Mortality Livestock Insurance in Mongolia

This briefing describes the Index-Based Livestock Insurance (IBLI) project in Mongolia, a public-private partnership supported by the World Bank. The program uses an index of aggregated criteria, such as regional livestock mortality rates, to trigger payouts rather than individual loss assessments. This approach aims to provide financial security to herders facing climate-related risks, specifically 'dzuds' (extreme weather events), while encouraging the adoption of sustainable grazing practices to build long-term resilience.

• The Index-Based Livestock Insurance (IBLI) project was established to protect Mongolian herders from mass livestock losses caused by 'dzuds'—extreme weather events involving drought, heavy snowfall, extreme cold, and windstorms. In 2010, over 50% of herders were affected, with 75,000 losing more than half their livestock.
• Index-based insurance differs from traditional insurance by triggering payouts based on aggregated criteria, such as livestock losses over a geographic area, which reduces transaction costs and avoids 'moral hazard'. This is particularly useful in Mongolia's sparsely populated areas where traditional insurance is often unavailable.
• The IBLI project has seen significant uptake and impact: 16,000 policies were purchased in 2012, and between 2006 and 2010, approximately 175,000 households insured over 3.2 million animals. Following the 2008 dzuds, about US$340,000 (MNT 389 million) was paid to 1,783 herders.
• The Government of Mongolia integrates insurance into a broader risk management strategy to increase climate resilience. This includes promoting rain and flood water harvesting, introducing climate-resilient animal breeds, improving veterinary services, and encouraging herders to adjust animal numbers to the carrying capacity of pastureland.
• High-quality mortality data is essential for the program's sustainability. Mongolia utilizes a livestock census conducted every December since the 1920s and a mid-year survey implemented by the National Statistics Office with advisory services from the U.S. Department of Agriculture’s National Agricultural Statistic Service.
• Affordability remains a challenge; most herders currently insure only about 30% of their livestock. Factors affecting affordability include climate change uncertainty, which may lead insurers to raise prices, and fluctuations in the market value of products like cashmere, which saw a price drop of nearly 50% between 2008 and 2009.
• The project's implementation costs were just under US$10 million (excluding the CDF), covering public awareness, institutional capacity, and project management. Five insurance companies currently participate in the IBLI in Mongolia.

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} }