MUMBAI: The market for insuring cattle could potentially double with technology that helps in identifying them using images of their muzzles (noses), which is as unique as a human fingerprint.
One of the biggest issues faced by insurers is that they can never be sure if a cattle claim is for an animal they have insured. As a result, only 4% of cattle are insured while 7-8% are funded through bank loans.
Dvara E-Dairy Solutions, an arm of Dvara Trust (formerly known as IFMR Trust), has developed a mobile application that can scan the muzzle print. This is considered as a unique biometric identifier for cattle such as cows and buffaloes. Dvara has tied up with insurance companies and aims to provide cover for close to 1 million heads of cattle using this technology.
Speaking to TOI, Dvara E-Dairy Solutions founder-director Ravi K A said that the application is most suitable for insurance companies and it is working as a technology solution provider for insurers. “We are working with a few insurance companies and have already concluded a pilot project with one of them,” he said.
“India has the largest cattle population of 300 million. Only 4% of these are insured while 6-8% of these are funded by lending institutions. Not all the cattle loans are insured and rural households can suffer a severe financial shock if their cattle die,” said Ravi.
The new technology to identify cattle will make it easier for insurers to cover them from even remote locations. Traditional cattle identification included methods such as ear tagging, or even some that used an injectable radio frequency identification (RFID) tag, which have their own set of challenges.
“The primary drawbacks of injectable RFID tags are that they are not cost-effective, require specialised skills to inject (sub-cutaneous) and the tags have a limited timespan,” said Ravi. Likewise, the implanted labels of ear tags, associated with the ear of cattle, get eventually damaged or fade over some time and are also prone to tampering or duplication.
Lack of tamper-proof, scalable, unique digital identity of cattle is one of the reasons for moral hazard, resulting in a higher loss ratio for cattle insurers, said Ravi.
05-03-2021
