Human-Wildlife Conflict Insurance: A New Frontier in Microinsurance

The Growing Need for Human-Wildlife Conflict Insurance

As human populations continue to expand into natural habitats, the inevitable clashes between humans and wildlife are becoming more frequent. This phenomenon, known as human-wildlife conflict (HWC), includes wild animals destroying crops, killing livestock, damaging property, and even attacking humans. The World Wide Fund for Nature (WWF) reports that HWC is a significant issue in many parts of the world, particularly in Africa, Asia, and parts of North America. In Kenya alone, close to 3,000 cases of crop damage were recorded between 2015 and early 2017, compared to 148 death and injury incidences. These numbers likely underreport the true frequency of HWC crop damage, which can have significant financial ramifications for communities dependent on farming and livestock rearing.

Compensation Schemes and Their Limitations

Compensation schemes for HWC are not new, especially in areas with high rates of human-wildlife interaction. These schemes aim to mitigate financial losses by reimbursing farmers for property damage caused by wild animals. However, these schemes can be expensive and often rely on donations, leading to issues with financial stability and sustainability. For instance, a compensation scheme in the Mwaluganje elephant sanctuary collapsed when funding ran out. This highlights the need for a more sustainable solution, such as insurance, which can pool larger numbers, employ technology, and manage the entire client journey from registration to claim settlement.

The Role of Microinsurance in Mitigating HWC

Microinsurance offers a promising solution to the challenges posed by HWC. AB Consultants, in partnership with the International Institute of Environment and Development (IIED) and funded by the Darwin Initiative, is developing a microinsurance product specifically for HWC. The project, known as "Livelihoods Insurance From Elephants" (LIFE), is currently focused on two regions in Sri Lanka and Kenya. The insurance aims to reduce losses for small-holder farmers and other low-income households from HWC. The LIFE project is still in the development phase, but it is expected to include coverage for crop and property damage, as well as death and injury. Consumers in the pilot regions have expressed positive attitudes towards this insurance, and the plan is to begin product rollout in January 2020.

For those interested in microinsurance, it is recommended to stay informed about developments in this field and to consider how such products could benefit their communities. Additionally, supporting conservation efforts and sustainable land use practices can help reduce the frequency and severity of HWC.