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

1. 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

2. Table of Contents
1. Introduction ............................................................................................................................. 2
2. Qualitative Research ................................................................................................................ 2
2.1 Instruments ............................................................................................................................ 2
2.2 Sampling ............................................................................................................................... 2
3. The Insurance Product and its performance ............................................................................ 3
4. Outcomes of the Qualitative Study.......................................................................................... 4
4.1 Major Points of Discussion ................................................................................................... 4
4.2 The FGD Outcomes .............................................................................................................. 4
Conclusion ...................................................................................................................................... 9
Annexure ....................................................................................................................................... 10
Annexure 1: Discussion Guide ................................................................................................. 10
Annexure 2: List of Villages where FGDs were conducted ..................................................... 13
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3. 1. Introduction
IFFOC 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. The
project started in the year 2009 and the insurance cycle has completed one product cycle in the
months of August-September 2010.
The qualitative study was targeted to get some insights into the product features and related
customer perception of various process features as well. The qualitative study was conducted in
the 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 research
question:
“What is a perception of the new RFID product by cattle owners? How does the introduction of
the RFID technology improve value from livestock insurance for cattle owners (premium
reduction, quicker claims settlement, lower veterinarian costs)?”
2. Qualitative Research
2.1 Instruments:
For the qualitative study, focussed group discussions were used as the instrument. Total of 10
such focussed group discussions were conducted. 6 of such discussions were conducted in the
villages where RFID tags were used to identify the insured cattle. 3 of such discussions were
conducted in villages where only plastic tags were used to identify insured cattle. One of the
discussions was also conducted
The initial plan to conduct 11 FGDs did not fructify as one of the villages where ITGI had
offered both RFID and plastic tags to identify insured cattle, did not co-operate in conducting the
discussion. Hence, only 10 FGDs were conducted.
2.2 Sampling:
During FGDs we made sure that farmers participating in the discussion represent of all type of
farmers 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 of
income during lean period). Farmers with different categories of land holding (ranging from 1
acre to 70 acres) participated in the discussions. Also, farmers with varied numbers of cattle
ownership (ranging from 1- 16 cattle) participated in the discussions as well.
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4. 3. The Insurance Product and its performance
The “Pashu-Dhan Bima” cattle insurance product is being implemented to test the process
innovation of introduction of RFID tags to identify the insured cattle. The premium charged in
this case ranges from 3.5 to 4 per cent of the sum assured (value of the cattle). The insurance
product is offered as a “credit linked” product, where in the farmers/ cattle owners who have
availed credit from the Co-operative Bank are insured.
ITGI uses the network of “Bima Kendras” (one manned micro offices) of IFFCO TOKIO
Insurance Services Ltd., which is 100% subsidiary of ITGI and acts as the corporate agent of
ITGI 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 farmers
about 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 to
make the access easy for the farmers.
Registration Process:
The “Bima Sahayaks” along with a veterinary doctor inspect each and every cattle before
insurance. The RFID tagging is done by veterinary doctor in presence of “Bima Sahayaks”. The
RFID capsule is injected in the auricular (ear) region of cattle’s body. After injecting the RFID
capsule, the “Bima Sahayaks” captures the tag number by reading the same using the RFID
reader. He then explains the process of identification, process for claim settlement to the
household and also demonstrates the identification number reading before them. He then takes a
photograph of the animal to identify the animal and the veterinarian issues health certificate of
the cattle.
Claim Process:
At the time of claims, the claimant farmer has to inform the “Bima Sahayaks” about the death of
the cattle. Upon receipt of information about death of the cattle, the “Bima Sahayaks” visits the
site and inspects the carcass. He identifies the cattle using the RFID reader and certifies death of
the cattle after establishing the identity using the RFID tag number. The cattle owner also has to
submit a “Post Mortem” report, issued by a practising veterinarian along with two photographs
of the animal. The normal claim settlement process under this system takes about 15 days
because of the process improvements such as RFID identification, physical verification by
insurance advisor and lesser documentation hassles.
Performance:
In the first year of the product cycle, the product covered 629 cattle (with 394 RFID tags and 235
plastic tags). Out of this insured cattle population, 11 death claims have been received for
insurance pay out. A total of 9 claim cases have been already paid and 2 of the claim cases (one
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5. each from Kuda and Mokasana villages) are under settlement process. An interesting observation
was that all the claims received for insurance payouts are for the cattle tagged with RFID tags.
4. Outcomes of the Qualitative Study
4.1 Major Points of Discussion
The 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. The
main 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 who
participated in the FGDs and also Venn diagram was used to map the institutional resources
which are at disposal to the farmers.
4.2 The FGD Outcomes
General Observations:
Most of the farmers responded to have livestock rearing as the secondary source of income (less
than 25 per cent of total income). Only in cases where the cattle owner has herd size of more
than 10-12, livestock accounted for major portion of the family income (primary source of
income). But, one important idea which emerged from the discussions was that because the cash
flow from livestock rearing is continuous (except in the dry period), the preference for livestock
is very high. Also, the mutuality between livestock rearing and agriculture helps farmers to use
the residues of one into the other.
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6. With respect to the problems faced in livestock rearing the major concern for farmers was
availability of water during summer months (in Kuda village). Elsewhere farmers responded that
as such they do not face any significant challenge in rearing. They also pointed out that as most
of the breeds which they rear are indigenous, such breeds can withstand some of the challenges
such as water scarcity, hot summers (normal temperature range in the area was around 45 degree
Celsius) and few diseases as compared to cross breed cattle. Fodder availability was not a
challenge as the farmers also cultivated some land and thus were able to use the leftovers of the
crops as fodder.
Veterinary care services were also readily available to the farmers; either through the veterinary
services 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 a
significant 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 solutions
which 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 cattle
through the network of Village Dairy Co-operative. Also, farmers usually attend the awareness
campaigns organised by the Dairy Co-operative (currently there is a lot of thrust on Clean Milk
Production 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 insurance
cover. Otherwise, farmers do not perceive much value in cattle insurance voluntarily. With
respect to the cattle insurance provided by ITGI, in villages where RFID tags were used for
identification, farmers were of the opinion that this is a unique system to identify the cattle. They
were excited because the injection of RFID capsule causes lesser pain to the cattle as compared
to ear-piercing plastic or brass tags. But, in the two cases, where claims are under process due
non-receipt of RFID tag readings, farmers were critical of the system. They had complains
related 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 complains
about durability of the plastic tags. In Ganget village, 3 farmers categorically pointed out that
plastic tags are lost by cattle while grazing or broken in case cattle fight with others and thus are
non-durable.
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7. Awareness:
Farmers had a good sense about the product features. The most important aspects which they
highlighted were the registration process and the claim information process. The engagement of
the “Bima Sahayaks” and the empanelled doctor during the entire processes, from registration to
claim 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 when
readings 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 not
produce any readings and thus, their claims were not being paid. Otherwise, even they
were satisfied with the processes which are being followed from registration to claim
management.
Past Experience:
When asked about their previous experience with cattle insurance, farmers in all the FGDs
pointed to the delay in claim settlement and claim pay out. In those cases where claim payouts
were made by ITGI promptly (9 cases, 4 from the village Kuda), people praised the product and
process features in making speedy claim payouts. They also highlighted the issue of unawareness
about the product features in case of their previous experiences with cattle insurance. In the
present intervention, “Bima Sahayaks” had explained the product features and the claim
settlement process to the Chairman of the Village Service Co-operative Society and the farmers
whose cattle were insured.
Only in the two cases where the claims payout was delayed (in Kuda and Mokasana
villages) due to non-receipt of RFID tag readings, farmers were of the opinion that the
plastic/ metal tags were much better as the farmer could visibly ascertain the tags. In
present 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, the
perception was that cattle insurance does not carry much value for them. They had refused to
avail insurance because they were not willing to pay for the premium voluntarily and also their
past claim experiences with other insurance company was very bad.
Marketing and Renewals:
Farmers across all villages (where FGDs were conducted) had information about the cattle
insurance offered by ITGI. This clearly indicated that people were exposed to information about
the product from some external source. The “Bima Sahayaks” of ITGI were responsible for the
spread of information about the cattle insurance product offered by ITGI.
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8. When asked about renewals, farmers were of the opinion that cattle insurance does not carry
much value to them as a risk management tool. Some also pointed out towards unavailability of
cash with them (liquidity) to pay for the premiums. As the present insurance product is credit
linked, farmers do not have to make premium payment from their pocket but the same is debited
from the loan account. Even with introduction of the idea that premiums would reduce for
subsequent 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 rankings
to four major aspects of the product i.e. enrolment process, technology (RFID), claim settlement
process and claim settlement time. The following table presents the product attribute rankings
assigned 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 Process
Kuda 1 - - - 3 2 4
Kuvasana 3 - - - 4 2 1
Pratapgarh 4 - - - 2 3 1
Mokasana 1 - - - 2 4 3
Fuletra 4 - - - 3 2 1
Vinayakpur 3 - - - 2 4 1
Denap 1 - - - - 3 2
Khakhadi 1 - - - - 2 3
Ganget 1 - - - - 2 3
Deusana Did not participate in the Product attribute ranking.
Source: PRA Exercise.
In the villages with RFID tags, higher rankings were assigned to claim settlement process
because of the positive experience of the farmers. Farmers explained that they faced less of
hassles in the claim settlement process and were aware about how and whom to inform in case of
death of the cattle. Farmers in these villages did not rated three attributes i.e. mode of premium
payment, premium amount and coverage of the product because the premium was debited from
their 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 with
other products from their past experience, so they did not rank this attribute as well.
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9. In the three villages where plastic tags were used, farmers ranked only three out of seven
attributes of the insurance product (enrolment process, claim settlement time and claim
settlement process). As they were not exposed to the RFID technology, they did not respond with
respect to technology aspect in product ranking. In all the three villages, farmers assigned first
rank to enrolment process and in two villages they assigned second rank to claim settlement
time. In the village where the ITGI cattle insurance product was not offered, people were not
able 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 in
the 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 rearing
and then used Venn diagram method to ascertain the relative importance of those facilities or
institutions. The following table represents the institutions identified by the farmers:
Table 2: Institutions beneficial for cattle owners
Institutions present in the Village Institutions outside Village Boundary
Dairy Co-operative Society Cooperative Banks, Nationalised Banks
Primary 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 from
farmers perceptive. As the Dairy Co-operative Society was responsible for delivery of many
services to the farmers, they attribute high value to it. Even the Primary Agriculture Co-operative
Societies in all the villages assumed high value for the farmers. Inside the village, local money
lender was an entity which supported them in time of emergencies and provided financial
assistance as and when needed, it also assumed a good value for the farmers.
Banks and private practising Veterinarians assumed high importance among the institutions
which were outside the village boundary. Farmers also accorded importance to Government
Veterinary Hospital, as in case of emergencies related to cattle health, they had to resort to its
services. Dairy Union was also given due importance as many of the services were provided to
cattle owners through it. These services included veterinary support including vaccination etc.,
insurance of cattle, provision of cattle feed etc.
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10. Conclusion
The qualitative study revealed many aspects about the product features and people’s
perception about using RFID for identification of cattle. The most interesting factors which
emerged from the study are that the improved process of enrolment and claim settlement
process were very much favoured by the farmers. Farmers had praises about the RFID
tags in places where claims were settled in time and payouts were made. Where ever the
technology failed to deliver the results (because of technological glitches), farmers showed
scepticism about RFID.
Farmers, overall, were very positive about the transparent process from enrolment to claim
settlement. The reduction in claim settlement time (to an average of 15 days) was an
achievement of introduction of RFID and improved processes followed by ITGI.
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11. Annexure
Annexure 1: Discussion Guide
General:
 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
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12.  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)?
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13. PRA Tools:
1. Product Attribute Ranking
Criteria/component Rank Comments
Enrollment process
Mode of premium payment
Premium Amount
Coverage
Technology (RFID)
Claim Settlement Time
Claim Settlement Process
2. 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.
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14. Annexure 2: List of Villages where FGDs were conducted
Serial No. Name of the Village Type of Tag Used No. of Participants
1 Kuda RFID 12
2 Kuvasana RFID 10
3 Pratapgarh RFID 6
4 Mokasana RFID 10
5 Fuletra RFID 10
6 Vinayakpura RFID 10
7 Denap PU 10
8 Khakhadi PU 10
9 Ganget PU 10
10 Deusana No Insurance Offered 10
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