Pastoralist communities in Eastern Ethiopia face significant risks associated with livestock production, including droughts and disease outbreaks. Livestock insurance is proposed as a mechanism to mitigate these risks, but its effectiveness remains uncertain. A combination of qualitative interviews (n=30) and quantitative surveys (n=200) were conducted to explore participants' perceptions of insurance effectiveness, coverage adequacy, and financial outcomes. Data was analysed using thematic analysis and descriptive statistics. Findings indicate that while approximately 75% of households had enrolled in livestock insurance schemes, only about half reported receiving payouts during a severe drought event, highlighting the need for better risk assessment mechanisms within policies. The reviewed insurance programmes demonstrate mixed effectiveness, with significant disparities in coverage and payout rates among different pastoralist groups. Policy recommendations aim to improve scheme design and enhance stakeholder engagement. Recommendations include expanding insurance coverage to cover a wider range of livestock species and diseases, integrating drought risk management strategies into insurance policies, and improving communication channels between policy makers and insured communities.
Alemayehu Weymessa (2012) studied this question.