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Qualitative Study Report (IFFOC TOKIO PASHU DHAN BIMA YOJANA) for Cattle Microinsurance Project

Qualitative Study Report (IFFOC TOKIO PASHU DHAN BIMA YOJANA) for Cattle Microinsurance Project

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Qualitative study pashu_dhan Qualitative study pashu_dhan Document Transcript

  • Pashu-Dhan Bima: Livestock Insurance by ITGI (Research, Monitoring and Evaluation) Qualitative Study (4th-8th October, 2010) Centre for Insurance and Risk Management, IFMR 10/20/2010
  • Table of Contents1. Introduction ............................................................................................................................. 22. Qualitative Research ................................................................................................................ 2 2.1 Instruments ............................................................................................................................ 2 2.2 Sampling ............................................................................................................................... 23. The Insurance Product and its performance ............................................................................ 34. Outcomes of the Qualitative Study.......................................................................................... 4 4.1 Major Points of Discussion ................................................................................................... 4 4.2 The FGD Outcomes .............................................................................................................. 4Conclusion ...................................................................................................................................... 9Annexure ....................................................................................................................................... 10 Annexure 1: Discussion Guide ................................................................................................. 10 Annexure 2: List of Villages where FGDs were conducted ..................................................... 13 1
  • 1. IntroductionIFFOC TOKIO General Insurance Co. Ltd. (ITGI), a private insurer in India has offered RFID(Radio frequency identification device) based tags for identification of the insured cattle. Theproject started in the year 2009 and the insurance cycle has completed one product cycle in themonths of August-September 2010.The qualitative study was targeted to get some insights into the product features and relatedcustomer perception of various process features as well. The qualitative study was conducted inthe villages of Mehsana district, Gujarat during the period from 4th to 8th of October, 2010.Qualitative study was conducted to get farmer’s feedbacks with respect to the following researchquestion:“What is a perception of the new RFID product by cattle owners? How does the introduction ofthe RFID technology improve value from livestock insurance for cattle owners (premiumreduction, quicker claims settlement, lower veterinarian costs)?” 2. Qualitative Research2.1 Instruments:For the qualitative study, focussed group discussions were used as the instrument. Total of 10such focussed group discussions were conducted. 6 of such discussions were conducted in thevillages where RFID tags were used to identify the insured cattle. 3 of such discussions wereconducted in villages where only plastic tags were used to identify insured cattle. One of thediscussions was also conductedThe initial plan to conduct 11 FGDs did not fructify as one of the villages where ITGI hadoffered both RFID and plastic tags to identify insured cattle, did not co-operate in conducting thediscussion. Hence, only 10 FGDs were conducted.2.2 Sampling:During FGDs we made sure that farmers participating in the discussion represent of all type offarmers who have livestock as primary and secondary source of income (like large dairy farmer,small/marginal dairy farmer, farmer with huge land who has livestock as secondary source ofincome during lean period). Farmers with different categories of land holding (ranging from 1acre to 70 acres) participated in the discussions. Also, farmers with varied numbers of cattleownership (ranging from 1- 16 cattle) participated in the discussions as well. 2
  • 3. The Insurance Product and its performanceThe “Pashu-Dhan Bima” cattle insurance product is being implemented to test the processinnovation of introduction of RFID tags to identify the insured cattle. The premium charged inthis case ranges from 3.5 to 4 per cent of the sum assured (value of the cattle). The insuranceproduct is offered as a “credit linked” product, where in the farmers/ cattle owners who haveavailed credit from the Co-operative Bank are insured.ITGI uses the network of “Bima Kendras” (one manned micro offices) of IFFCO TOKIOInsurance Services Ltd., which is 100% subsidiary of ITGI and acts as the corporate agent ofITGI for marketing the insurance products. The Bima Kendras are manned by “Bima Sahayaks”(Relationship Executives) who educate the village co-operative society staff and the farmersabout the product at the time of enrolment of the cattle. All the insurance related brochures,claim process documents etc. are made available at the village co-operative society office so at tomake the access easy for the farmers.Registration Process:The “Bima Sahayaks” along with a veterinary doctor inspect each and every cattle beforeinsurance. The RFID tagging is done by veterinary doctor in presence of “Bima Sahayaks”. TheRFID capsule is injected in the auricular (ear) region of cattle’s body. After injecting the RFIDcapsule, the “Bima Sahayaks” captures the tag number by reading the same using the RFIDreader. He then explains the process of identification, process for claim settlement to thehousehold and also demonstrates the identification number reading before them. He then takes aphotograph of the animal to identify the animal and the veterinarian issues health certificate ofthe cattle.Claim Process:At the time of claims, the claimant farmer has to inform the “Bima Sahayaks” about the death ofthe cattle. Upon receipt of information about death of the cattle, the “Bima Sahayaks” visits thesite and inspects the carcass. He identifies the cattle using the RFID reader and certifies death ofthe cattle after establishing the identity using the RFID tag number. The cattle owner also has tosubmit a “Post Mortem” report, issued by a practising veterinarian along with two photographsof the animal. The normal claim settlement process under this system takes about 15 daysbecause of the process improvements such as RFID identification, physical verification byinsurance advisor and lesser documentation hassles.Performance:In the first year of the product cycle, the product covered 629 cattle (with 394 RFID tags and 235plastic tags). Out of this insured cattle population, 11 death claims have been received forinsurance pay out. A total of 9 claim cases have been already paid and 2 of the claim cases (one 3
  • each from Kuda and Mokasana villages) are under settlement process. An interesting observationwas that all the claims received for insurance payouts are for the cattle tagged with RFID tags. 4. Outcomes of the Qualitative Study4.1 Major Points of DiscussionThe FGDs were directed to get the feedback of cattle owners who were insured into the “Pashu-Dhan Bima” scheme about various aspects of the product features and process features. Themain points of exploration are as follows:  Dependence of household on livestock as source of income.  Problems/ challenges in rearing livestock.  Risk attitudes of the cattle owners, their past experience.  Product and process literacy (awareness about the product).  Benefits of RFID in improving the livestock insurance process. o Ease in documentation for enrolment/ registration o Claim management  Source of information about the insurance product and RFID.  Renewals of the policy due to reduced premiums.  Product feedback.As part of the qualitative study, product attribute ranking was also performed by the farmers whoparticipated in the FGDs and also Venn diagram was used to map the institutional resourceswhich are at disposal to the farmers.4.2 The FGD OutcomesGeneral Observations:Most of the farmers responded to have livestock rearing as the secondary source of income (lessthan 25 per cent of total income). Only in cases where the cattle owner has herd size of morethan 10-12, livestock accounted for major portion of the family income (primary source ofincome). But, one important idea which emerged from the discussions was that because the cashflow from livestock rearing is continuous (except in the dry period), the preference for livestockis very high. Also, the mutuality between livestock rearing and agriculture helps farmers to usethe residues of one into the other. 4
  • With respect to the problems faced in livestock rearing the major concern for farmers wasavailability of water during summer months (in Kuda village). Elsewhere farmers responded thatas such they do not face any significant challenge in rearing. They also pointed out that as mostof the breeds which they rear are indigenous, such breeds can withstand some of the challengessuch as water scarcity, hot summers (normal temperature range in the area was around 45 degreeCelsius) and few diseases as compared to cross breed cattle. Fodder availability was not achallenge as the farmers also cultivated some land and thus were able to use the leftovers of thecrops as fodder.Veterinary care services were also readily available to the farmers; either through the veterinaryservices provided by the Village Dairy Co-operative or through the private practitioners(Veterinarians). So, farmers were of the opinion that health care services for the cattle were not asignificant challenge for the farmers. Heavy rains during this season monsoon caused floods.Risk Attitude:Overall the risk attitude of farmers was much skewed towards the risk management solutionswhich were readily available to them, such as social networks (within the villages/ with relatives)and the services provided by village level institutions (Dairy Co-operative per se). To add to that,they did not perceive the risks associated with cattle rearing as significant risks to them.Risk reduction facilities such as vaccination and de-worming were made available to the cattlethrough the network of Village Dairy Co-operative. Also, farmers usually attend the awarenesscampaigns organised by the Dairy Co-operative (currently there is a lot of thrust on Clean MilkProduction and thus more of such meetings are being organised).Insurance of the cattle does not carry very high value to the farmers as a risk management tool.The existing cover was provided to them because it was a mandatory credit linked insurancecover. Otherwise, farmers do not perceive much value in cattle insurance voluntarily. Withrespect to the cattle insurance provided by ITGI, in villages where RFID tags were used foridentification, farmers were of the opinion that this is a unique system to identify the cattle. Theywere excited because the injection of RFID capsule causes lesser pain to the cattle as comparedto ear-piercing plastic or brass tags. But, in the two cases, where claims are under process duenon-receipt of RFID tag readings, farmers were critical of the system. They had complainsrelated to non-payment of claims during the promised time-frame (15 days).In villages where plastic tags were used for identification of animals, farmers had complainsabout durability of the plastic tags. In Ganget village, 3 farmers categorically pointed out thatplastic tags are lost by cattle while grazing or broken in case cattle fight with others and thus arenon-durable. 5
  • Awareness:Farmers had a good sense about the product features. The most important aspects which theyhighlighted were the registration process and the claim information process. The engagement ofthe “Bima Sahayaks” and the empanelled doctor during the entire processes, from registration toclaim settlement, and their visits to farmer households made them feel valued.Farmers also pointed out at the use of RFID tags and their ability to see the tag numbers whenreadings were taken by the RFID reader device.Only in case of the two pending claims, farmers had complains related to delivery issues.They pointed out that at the time of inspection of the carcass, the RFID reader did notproduce any readings and thus, their claims were not being paid. Otherwise, even theywere satisfied with the processes which are being followed from registration to claimmanagement.Past Experience:When asked about their previous experience with cattle insurance, farmers in all the FGDspointed to the delay in claim settlement and claim pay out. In those cases where claim payoutswere made by ITGI promptly (9 cases, 4 from the village Kuda), people praised the product andprocess features in making speedy claim payouts. They also highlighted the issue of unawarenessabout the product features in case of their previous experiences with cattle insurance. In thepresent intervention, “Bima Sahayaks” had explained the product features and the claimsettlement process to the Chairman of the Village Service Co-operative Society and the farmerswhose cattle were insured.Only in the two cases where the claims payout was delayed (in Kuda and Mokasanavillages) due to non-receipt of RFID tag readings, farmers were of the opinion that theplastic/ metal tags were much better as the farmer could visibly ascertain the tags. Inpresent case, the farmers do know which animal was tagged by RFID tags.In the village where farmers had refused to avail the cattle insurance offered by ITGI, theperception was that cattle insurance does not carry much value for them. They had refused toavail insurance because they were not willing to pay for the premium voluntarily and also theirpast claim experiences with other insurance company was very bad.Marketing and Renewals:Farmers across all villages (where FGDs were conducted) had information about the cattleinsurance offered by ITGI. This clearly indicated that people were exposed to information aboutthe product from some external source. The “Bima Sahayaks” of ITGI were responsible for thespread of information about the cattle insurance product offered by ITGI. 6
  • When asked about renewals, farmers were of the opinion that cattle insurance does not carrymuch value to them as a risk management tool. Some also pointed out towards unavailability ofcash with them (liquidity) to pay for the premiums. As the present insurance product is creditlinked, farmers do not have to make premium payment from their pocket but the same is debitedfrom the loan account. Even with introduction of the idea that premiums would reduce forsubsequent renewals, farmers did not show interest in renewal of the insurance policy.Product Attribute Ranking:In the villages with RFID tags for identification of cattle (six villages) farmers gave top rankingsto four major aspects of the product i.e. enrolment process, technology (RFID), claim settlementprocess and claim settlement time. The following table presents the product attribute rankingsassigned by different groups:Table 1: Product Attribute Rankings Enrolment Mode of Premium Coverage Technology Claim Claim Process Premium Amount (RFID) Settleme Settleme Payment nt nt Time ProcessKuda 1 - - - 3 2 4Kuvasana 3 - - - 4 2 1Pratapgarh 4 - - - 2 3 1Mokasana 1 - - - 2 4 3Fuletra 4 - - - 3 2 1Vinayakpur 3 - - - 2 4 1Denap 1 - - - - 3 2Khakhadi 1 - - - - 2 3Ganget 1 - - - - 2 3Deusana Did not participate in the Product attribute ranking.Source: PRA Exercise.In the villages with RFID tags, higher rankings were assigned to claim settlement processbecause of the positive experience of the farmers. Farmers explained that they faced less ofhassles in the claim settlement process and were aware about how and whom to inform in case ofdeath of the cattle. Farmers in these villages did not rated three attributes i.e. mode of premiumpayment, premium amount and coverage of the product because the premium was debited fromtheir loan account and so they did not have any idea about the premium and its mode of payment.Also with respect to coverage under the insurance, farmers were not able to differentiate withother products from their past experience, so they did not rank this attribute as well. 7
  • In the three villages where plastic tags were used, farmers ranked only three out of sevenattributes of the insurance product (enrolment process, claim settlement time and claimsettlement process). As they were not exposed to the RFID technology, they did not respond withrespect to technology aspect in product ranking. In all the three villages, farmers assigned firstrank to enrolment process and in two villages they assigned second rank to claim settlementtime. In the village where the ITGI cattle insurance product was not offered, people were notable to perform product ranking as they had no experience about the product.Venn Diagrams:Venn diagram was used to ascertain the relevance of various institutions or facilities available inthe village, or which the farmers access, which are beneficial to the cattle owners. Initially,farmers identified the institutions that they frequently interact with in relation to cattle rearingand then used Venn diagram method to ascertain the relative importance of those facilities orinstitutions. The following table represents the institutions identified by the farmers:Table 2: Institutions beneficial for cattle ownersInstitutions present in the Village Institutions outside Village BoundaryDairy Co-operative Society Cooperative Banks, Nationalised BanksPrimary Agriculture Co-operative Society Private Veterinarian(PACS)Moneylender Government Veterinary Hospital Dairy Union Source: PRA Exercise.In all the villages, the Village Dairy Co-operative Society was the most valued institutions fromfarmers perceptive. As the Dairy Co-operative Society was responsible for delivery of manyservices to the farmers, they attribute high value to it. Even the Primary Agriculture Co-operativeSocieties in all the villages assumed high value for the farmers. Inside the village, local moneylender was an entity which supported them in time of emergencies and provided financialassistance as and when needed, it also assumed a good value for the farmers.Banks and private practising Veterinarians assumed high importance among the institutionswhich were outside the village boundary. Farmers also accorded importance to GovernmentVeterinary Hospital, as in case of emergencies related to cattle health, they had to resort to itsservices. Dairy Union was also given due importance as many of the services were provided tocattle owners through it. These services included veterinary support including vaccination etc.,insurance of cattle, provision of cattle feed etc. 8
  • ConclusionThe qualitative study revealed many aspects about the product features and people’sperception about using RFID for identification of cattle. The most interesting factors whichemerged from the study are that the improved process of enrolment and claim settlementprocess were very much favoured by the farmers. Farmers had praises about the RFIDtags in places where claims were settled in time and payouts were made. Where ever thetechnology failed to deliver the results (because of technological glitches), farmers showedscepticism about RFID.Farmers, overall, were very positive about the transparent process from enrolment to claimsettlement. The reduction in claim settlement time (to an average of 15 days) was anachievement of introduction of RFID and improved processes followed by ITGI. 9
  • AnnexureAnnexure 1: Discussion GuideGeneral:  How much do you depend on livestock as a source of income? o Primary or Secondary source (secondary means when per month income is less than 25% of total income but more than 10%).  What are the major problems faced by livestock in the area? (give hints if people are not able to understand the question otherwise let them decide it) o Low value of cattle and low productivity o Feed and fodder  What kind of fodder is available in the area?  Dry Fodder (crops)  Green Fodder (cropped or grazing)  If they buy it from somewhere-  How far is that place?  What is the approximate price/quintal? o Diseases  Normal mortality rates (Buffalo, cattle)  Major diseases in the area due to which mortality happens or productivity decreases that impact the livestock  Any major epidemics in past 5 years o Water: Scarcity or water borne diseases due to unhygienic conditions o Environment: High temperature, shelter and other related problems o Credit crunch: for buying better quality animals or for insurance o Any other: Note down if we have missed that in above list!Specific:  Risk attitudes o What do you think is the best way to reduce risk for all of these problems? (Get opinion- See what options they tell. Capturing Risk Management solutions available/wished by cattle owners) o Steps taken by people to control risks (see which one the most sought after option)  Risk Reduction: Vaccination (name the diseases, when are the animals vaccinated) and De-worming (when and for which diseases)  Risk Transfer: Taking insurance (check if it was voluntary or mandatory product)  Awareness: Attending hygiene camps by govt/dairy-coop  Do nothing and bear the risk o Tell us about ITGI insurance program 10
  •  Get details- components of insurance program  How useful it was in reducing the risk faced by livestock?  Awareness o Product literacy  What are the important features of ITGI product? (Understanding of the product and its features). Can be compared with product note. o Process literacy  Describe the enrolment process?  Describe the claim settlement process?  Are there any service delivery issues, if any  Past experience o Did you buy any other policy earlier? What was your experience? Did you use plastic tags for your animal identification earlier? Were you happy with it? o Was ITGI better than previous experience with insurance?  Opinion on premium and its payment  Opinion on coverage (was it what they want- value-wise and product features wise)  Opinion on registration process  Opinion on marketing of the product  Claims settlement experience  Can you tell us how it benefitted you?  Renewals- how many will do the renewals o Why have you not opted for the scheme? (for group who did not buy the policy)  Provide specific reasons  Product feedback o Key features of the product liked and disliked by members  If you wish to re start the scheme what will you change in it? (What changes would you like in the present scheme that will induce you to buy the product?)Miscellaneous  Marketing o Did anybody inform you about the product ( to capture understanding of product)  Know-how o Do cattle owners know that they can use the same ear tag number for next year policy too?  Renewals o Will cattle owners buy the LI product again as due to RFID will help to reduce the premium amount (given that fraud cases will go down and hence will have positive impact on premium)? 11
  • PRA Tools:1. Product Attribute RankingCriteria/component Rank CommentsEnrollment processMode of premium paymentPremium AmountCoverageTechnology (RFID)Claim Settlement TimeClaim Settlement Process2. Venn/ Chapati Diagrams  Looking at various facilities available at village level and their perceived benefits by cattle owners  Some of the important facilities are: Money lender (for credit to buy the product), Vet Services, Banks, MFI-NGOs, Dairy Co-operatives, Agro-advisory services, etc. 12
  • Annexure 2: List of Villages where FGDs were conductedSerial No. Name of the Village Type of Tag Used No. of Participants1 Kuda RFID 122 Kuvasana RFID 103 Pratapgarh RFID 64 Mokasana RFID 105 Fuletra RFID 106 Vinayakpura RFID 107 Denap PU 108 Khakhadi PU 109 Ganget PU 1010 Deusana No Insurance Offered 10 13