Drought compensation relieves Abag Banner

(chinadaily.com.cn)

Updated: 2017-07-13

Insurance claims worth 6.85 million yuan ($1 million) have been cashed in at the People’s Insurance Company of China (PICC) to compensate losses caused by the severe drought in Abag Banner, Xilin Gol League on July 5.

The money has so far covered the loss of 228,000 sheep from 1,028 households across seven towns in Abag Banner, according to PICC Inner Mongolia Branch.

In October 2016, PICC and the Abag Banner government agreed to underwrite the risks posed by extreme weather and livestock safety trouble in the banner.

Nearly 2.3 million yuan was paid to the insurance company who has undertaken the sum assured of over 28.5 million yuan during the contract duration.

The insurance claims were estimated via analysis of weather data by the local meteorology bureau alongside an investigation conducted by PICC staff in parched areas.

Inner Mongolia’s Abag Banner has confronted bitter drought since spring, impacting 2.3 million hectares of farmland and 1.3 million livestock.

With rising temperatures and little rainfall, a total of 4,458 households have experienced drought conditions in 71 villages across the banner.

Nevertheless, local herdsmen enrolled in the insurance scheme can receive 30 yuan per sheep, providing some relief from the damage.

In early March, the PICC Xilin Gol League Branch paid out 1.09 million yuan to compensate losses caused by winter blizzards.

To help protect their animals, some herdsmen have built enclosed sheep pens and the cost of breeding livestock has subsequently risen.

While insurance payouts can reduce the risk on some level by helping prevent herdsmen falling into abrupt poverty following a natural disaster –– herdsmen still live precarious lives. In some case, the compensation serves as poverty relief fund.

As China’s first insurance company, PICC has attached much importance to improving the public’s welfare and people’s livelihoods. The Inner Mongolia Branch has upheld the philosophy of contributing to the development of farming and reducing poverty.

Since 2015, PICC has been creating insurance products targeting local herdsmen and livestock and pioneered a way of diminishing loss in grazing areas.

PICC and Abag government have negotiated to create a pilot initiative focusing on utilizing supportive policies and commercial insurance to guarantee local herdsmen’s interests and property. A five-year contract was signed to further cooperation between the government and the company.