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Long-run effects of catastrophic drought insurance

How migration and poverty relate to each other?

Migration is a growing global issue and yet the relationship between extreme poverty and migration is complex and thinking in this area is continuing to evolve. There have been recent efforts to renew focus and understanding of migration for promoting sustainable development. However, the data and evidence around this relationship is limited. We explain this data gap in the below graphic.

The peace predicament: How to make a meaningful impact on extreme poverty in a world of conflict

“There can be no sustainable development without peace and no peace without sustainable development”, the UN 2030 agenda for Sustainable development asserts.

How a new type of insurance helps to relieve poverty in Ethiopia

Livestock owners in Ethiopia are in a hugely vulnerable position. Their livelihood is highly dependent on weather patterns and a drought could lead to catastrophic herd loss, potentially pushing them into extreme poverty. Livestock owners are currently unable to mitigate these risks since traditional insurance markets are overpriced and underprovided due to issues of moral hazard and adverse selection. However, a new form of index based livestock insurance (IBLI) addresses these issues by issuing indemnity payments based on objectively verifiable climatic reasons. In IBLI’s case the insurance pay-out is ingeniously based on vegetation levels as seen by remote satellite imagery which can be used to estimate livestock mortality rates.