2. Contents
• Cattle & Livestock insurance: applicability and type of animals covered
• The rationale and Market potential
• Cattle & Livestock Insurance at IFFCO TOKIO :The journey so far and Notable achievements
• The Product and Coverage options
• How Sum Insured to be determined?
• Premium
• Benefits/USP
• Who are our potential clients?
• Challenges
• Business Processes
• Approval/Screening/Policy Creation/Claims
– Approval: Approval Format
– Policy creation (CRM Demo)
– Screening of animals for health and disease
– Claims
• Animal Identification mechanism at IFFCO TOKIO
• Tagging process video demonstration(PU and RFID Tags)
• Photography guidelines: How to take tagging and claim photographs
• Dos and Don’ts
• Examples
– Why all or none
– Tagging position / Where to apply the tag (PU & RFID)
– Fraudulent practices : Tagging of Sick/injured animals, Double dipping, manipulation of tag, swiping of insurance
cover at retagging etc.
– Cases of extreme adverse selection
– Fraudulent claims
• Claim Process
• Claim Documents
• FAQs
2
3. Cattle & Livestock insurance
Applicability
The Cattle and livestock insurance policy is
applicable to various indigenous & exotic
cattle/livestock owned by individuals, various
financial institutions, dairy farms,
cooperatives and cooperative dairies etc.
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4. Type of animals covered
• Various animals which the policy covers are
– Milch cows/buffaloes
– Calves/heifers
– Stud bulls and
– bullocks (castrated bulls/male buffaloes) –
indigenous/cross-breed/exotic.
– Pig, camel, Horse, Mule, Donkey, Yak etc.
» Exotic animals –whose both parents are of foreign breed.
» Indigenous animals –whose both parents are of Indian
breed.
» Cross breed – one of whose parents is of foreign breed.
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5. The Rationale
• Statutory obligations, Mission compliance and Business Obligation
– Statutory requirements: Rural and social sector obligations
– Fulfils IFFCO’s objective: Developments of cooperatives and rural farmers
– Cooperative Bank’s have a large portfolio of cattle/livestock loans, thus to
become an attractive insurance partner for Cooperative banks
– Better positioned than other category of MI products because of comparatively
better premium ticket size
• A potential market
– India is world’s largest milk producer and has the largest cattle population in the
world
– Only 6% cattle are insured. Estimated market potential is of around 1600 crores.
• Social obligation
– Livestock still remains as a second source of livelihood with a huge population: It
is well known to all how livestock /dairy has shaped the rural economy in Gujarat
– Risk mitigation of this important asset is important
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6. Cattle & Livestock Insurance at
IFFCO TOKIO :The journey so far
0.39
0.93
2.38
3.05
4.95 4.95
8.25
11.18
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Gross
Written
Premium
(In
Cr.)
6
7. Cattle & Livestock Insurance at IFFCO
TOKIO: Few notable achievements
• Successfully implemented Centrally Sponsored
Livestock Insurance Scheme in
– Odisha
– Rajasthan
– Andhra Pradesh
– Gujarat
• In 2009 IFFCO TOKIO got an international recognition
through ILO’s Micro Insurance Innovation Facility for its
RFID project
• Piloted in Gujarat, Punjab, Rajasthan, Maharashtra, Tamil Nadu and
Odisha
• Covered 25,000 animals in this pilot
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8. Product and Coverage options
Also covers Pig, camel, Horse, Mule, Donkey, Yak etc on case to
case basis
• The product is a full benefit product
• Mainly three product categories
– PDM: Max SI 70K
– ICL: Where SI is more than 70K
– LDP: Govt. sponsored schemes
Animals covered Age group
Milch cows 2 years (or age at 1st Calving) to 10
years.
Milch Buffaloes 3 years (or age at 1st Calving) to 12
years.
Stud Bulls 2 years(or earlier i.e. age at sexual
maturity) to 8 years
Bullocks(Castrated bulls/ Male 2 years to 12 years
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9. Product and Coverage options
INCLUSIONS
Provides comprehensive cover to
livestock against death due to –
– Diseases
– Accidents
– Natural calamities
– Strike, Riots, & terrorism
Permanent Total Disability (PTD)***
: Means loss of milk yielding capacity
due to disease or failure to conceive.
Coverage is available at additional cost.
EXCLUSIONS
• Claim arising due to disease
contracted within 15 days from risk
date
• Claims received without intact Ear tag
• Intentional slaughter of the animal
and malicious damage
• Missing, Theft and/or clandestine sale
of the insured animal
• Partial Disablement of any type,
whether temporary or permanent
• War, nuclear material or weapons.
• Consequential loss of whatsoever
nature 9
10. How Sum Insured to be
determined?
General rule of thumb for assessing the market value
Cow=Present milk yield X INR Rs. 3000
Buffalo=Present milk yield X INR Rs. 4000
For Sum Insured, the Veterinary health certificate indicating market
value of the cattle will be the most authentic document.
Sum Insured should not exceed market value
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11. Premium
• Premium rates depend on various factors
such as breed, age, geography,
management conditions, past
claims/mortality history.
• It can also vary depending upon the
modalities adopted for the business
processes.
• The general range is around 3% to 8% of
Sum Insured for annual policy
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12. Mostly it is an “Agreed Value” policy
The full sum insured is settled at the time of
claim
Claim settlement ratio is more than 99%
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13. Who are our Potential Prospects
for Cattle/Livestock insurance?
• Banks financing cattle/livestock loans
• Other financial institutions such as NBFCs, MFIs funding
for cattle/livestock
• Smallholder and large commercial dairy farms
• Dairy processing companies, Milk Unions and Dairy
cooperative societies
• Agriculture and Dairy extension service providers
• NGOs and other development organizations into
livestock development
• State Animal Husbandry Department and State
Livestock Development Board ( Known with various
names in different states) 13
14. Challenges
LI business
is perceived
as loss
making
High Adverse
selection
Morale Hazard
Fraud
High servicing
cost
Limited
availability of
service providers
Animal
Identification
Overall reluctance
of the target
population
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16. Business Processes
• Proposal
Enquiry at
BK/LSC/SBU
Concerned office
will fill the Cattle
Approval Format
and send the same
to Corporate Office
• Proposal
validated at
Corporate
office and
approved
The BK/LSC/SBU
will follow the
approved process • Tagging will be
done by a
veterinary doctor
• Veterinary
Doctor will also
issue health
certificate.
Policy will be
created in CRM /
P-400
IFFCO TOKIO is also flexible in designing/customizing the business processes
as per the requirement of customers with mutual consent. 16
17. Working Synergy is must for
smooth business
Insurer
Customer
Service
provider
17
20. Used RFID micro chips to establish the identity of the insured animal. A
RFID micro chip contains an unique identification number. This is implanted
subcutaneously behind the auricular (ear) area with the help of a syringe for
establishing identity of the insured animal.
This technology was proved to be useful in preventing fraudulent
practices
Since the RFID capsule is inserted beneath the skin of the animal, the
risk of it falling off or being removed is mitigated.
The RFID tagging process is considered less painful than plastic tags
for the animal.
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22. How to take Tagging and Claim
photographs
• Minimum two Photographs of the tagged
animal to be taken
– One with clearly visible tag number
– Other with full body photograph of tagged
animal (Should highlight special marks if any)
• In case of Re-tagging it has to be ensured
that the re-tagged animal is the same
insured animal
The claim photographs should also follow the same pattern
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23. Dos and Don’ts
• Animals proposed for
insurance should be
marketable
• Preferably go for all or
none.
• Apply the ear tag firmly at
specified area of the ear
• Already tagged animals
should also qualify the
specifications
• Never tag a sick or
insured animal
• No double dipping is
allowed
• Don’t go for animals
already with pierced ears
• Don't accept animals
wearing tags in areas
other than specified
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24. FAQs
• Can we insure livestock other than cattle and buffalo? Can we cover
Horses and camels?
• Is insurance cover available for bullock?
• Sum Insured and age related queries
– Maximum Sum Insurd, Mimium Sum Insured, Maximum age, Minimum age
• Can we engage services of veterinarians other than regular service
providers ?
• Animal is injured. Whether proposal will be declined?
• Whether partial disablement is covered ?
• Whether cessation of milk yield is covered in the policy?
• If any claim is payable in case the insured animal dies due to
poisoning?
• When do I need to intimate a claim?
• Where do I intimate a claim ?
• When will the risk cover start ?
• What are the documents required to file a claim?
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