The Insurance Times April 2023

Scaling Cattle Insurance Through Digital Solutions

The cattle population in India, as per the latest census, is 303.7 million, which includes cows and buffaloes. India #1 in cattle population and also the largest milk producer in the world. Indian Government unveiled National Digital Livestock Mission at National Dairy Development Board, Anand, in 2021. A digital platform is prepared jointly by the Department of Animal Husbandry and Dairying and NDDB. The aim is to create a farmer-centric, technology-enabled ecosystem where the farmers can realize better income through livestock activities with the correct information. The farmers will have a unique cattle identity through permanent identification to keep track of health, breeding, traceability, insurance, and disease control.

Trigger for Innovation:

Insurance Industry has been in the cattle insurance business for nearly five decades in India. But today, the penetration of cattle insurance has been less than 5% of the cattle population in India, despite the support and push from the state/central Governments, and almost all private and public sector insurance companies of India have cattle insurance products in their product portfolio. Moreover, in general, 4-5% premium rates per annum are charged for cattle insurance by most insurers which are relatively very high compared to various other insurance products. The major challenge that emerged from talking to insurers is moral hazard, lack of tools to address adverse selection and high loss ratio. Although insurers attempted all possible measures , nothing has worked well and up to the satisfaction to build confidence in insurers having a fool proof solution. Many instances of misuse, manipulation of identification system are observed in the field.

Insurers have used various cattle identification methods such as tattooing, hot/cold branding, brass/polyurethane ear tagging or radio frequency identification devices (RFID). However, a more reliable solution is needed for bovine identification from theft, false claims, and duplication. The tattooing, hot/cold branding and brass ear tagging methods are obsolete. Affixing Polyurethane ear tag and injectable RFID requires skilled professionals and don’t complement scale in a fool-proof manner. Moreover, lack of tamper-proof, scalable, unique digital identity for bovines is one of the significant reasons for moral hazard, resulting in a higher loss ratio for livestock insurers. One of the most critical issues insurers face is that they are not sure if a cattle claim is for an animal that they have insured.

Innovative Approach

Animal biometrics can replace traditional identification methods by overcoming limitations and fulfilling the requirements for accurate and efficient cattle and buffalo identification. Muzzle printometry is one such technology, where the muzzle pattern images provide a better insight into biometry and a unique identification system. Nose prints are unique, unalterable, permanent, and verifiable identification method similar to human fingerprints in that no two nose prints of different cattle and buffalo are the same. This identification method is painless, unique, simple, reliable, verifiable, and scientific. The planum nasolabial or muzzle is a characteristic feature of an individual animal and remains constant with age, and the patterns remain intact up to thirty hours after death.

New Digital Solutions:

DvaraE-dairy solutions,a dairy tech, based at Chennai, India, has developed digital solutions leveraging deep learning and Artificial Intelligence to capture, retrieve and verify the identity of the cattle based on muzzle prints. This first-of-its-kind independently validated solution for the global market will benefit insurers, lending institutions and dairy farmers. The Surabhi e-tag facilitates the collection of muzzle images and instant feedback for the user to retake, avoiding operational hassle. The user with an android mobile phone can capture acceptable quality of muzzle images through the auto-capture feature and generate a unique Surabhi ID, a system-generated, unique alphanumeric number for the bovine during registration. Advanced models of algorithms are used to mitigate critical challenges and improve the quality of muzzle images. The images and the Surabhi ID can be used to validate/verify dead cattle as part of the claim validation process. Cattle identification is also critical to track productivity and health management and to avoid asset duplication while offering financial services, including insurance.

The product has been independently validated and has demonstrated accuracy of 97.6% to 100% based on field validations of live and dead cattle. The company is working with all major insurers on cattle insurance in India through an API integration approach or SaaS model. The agents/staff of insurers and other entities have used the muzzle ID solution for onboarding about 40000+ cattle and validated 2500+ cattle in two years of the solutions development phase.

The insurance companies per se have onboarded 31,000+  cattle using muzzle ID in addition to physical polyurethane or RFID ear tag as for cattle insurance. Out of 552 claim validations, 41 cases were found having same ear tag numbers while the cattle were different, verified through Surabhi ID.Insurers repudiated these claims which  resulted into avoidance of approximately Rs 20 lacs of actual or potential liabilities as their claims outgo. Insurers received no representation from those claimants whose claims were rejected based on muzzle identity. By having a plan for adopting this digital solution, companies can save their cost of cattle identification and become more efficient in the cattle insurance business.

Example of No Match of Muzzle Identity:

The following pictures are of two cattle; one at the time of onboarding ( tagging on 16th Sept 21) and the other at the time of the claim of dead cattle (validation on 1st June 22). Both cattle have the same ear tag, and the prominent body identification marks look similar. The insurance company would have settled the claim by going through the pictures of both cattle, when ear tag numbers match and body marks look similar, which the veterinary doctor in his report substantiates. Still, because of the muzzle pattern difference, it was authentically possible to disown the claim liability.

Way forward

These new-age innovative solutions are tamper-proof, provide a unique digital identity of bovines based on muzzle identity and can be a game-changer for various players in the dairy economy. The solution complements the growth of the underserved cattle insurance segment in a mutually rewarding manner for the dairy farmers and the insurers to achieve scale. The cattle and buffaloes’ insurance market could increase by many folds with the following technology solutions being provided by Dvara E dairy.

  1. Dvara Surabhi ID (e-Tag): Unique, tamper proof, verifiable identity of cattle (Muzzle identity)
  2. Dvara Surabhi Index: Unbiased, digital solution to address Anti/Adverse Selection for Underwriting acceptance
  3. Dvara Cattle Health Fitness Certificate: Leveraging artificial intelligence and advanced veterinary science & practice, verify the health status of cattle before onboarding for insurance.


Comparison between Physical and Digital Identification:

Polyurethane (PU) ear tags and RFID are physical identification, whereas muzzle print is an e-tag considered digital identification. There are the following differences/advantages of e-tag. The following comparison also indicates the cost-benefit for the digital solution users.

  Muzzle Print (e-Tag) Polyurethane Ear-tag / RFID
1 Non-Invasive Invasive in to the ear or body of animal
2 No technical person is required hence low cost A technical/skilled person can only do tagging specially RFID hence costly
3 No additional burden to sales team/vet/para-vet to carry tag applicator or reader and physical tags Sales team/ vet/para-vet have to carry ear tags and tag applicators or readers
4 No cost for tagging applicators/Readers Additional cost for tag applicators/readers and substantial cost for RFID tags
5 Mobile application can be downloaded by any number of persons engaged in the tagging It is not possible to give applicators or readers (in case of RFID tags ) to all users otherwise it would be a very costly affair or if not given then work efficiency will decrease
6 Identification of Cattle would never be questioned at the time of Claim since muzzle images are stored in Cloud server Sometimes Identification of cattle be questioned particularly when tags are lost/tampered/mutilated
7 There is no loss or damage to the e-tag There is physical loss or damage to the tags/RFID while being used in the field
8 No question of damage to tagging applicator/reader There is every likely of damage to Tag applicator or readers. Readers are costly and irreparable.
9 E-Tag addresses the apprehension of cattle farmers that milk yield will go down after putting the tag or cattle will become sick. Invariably, worries are there with cattle farmers that the milk yield will go down or animals will become sick after putting the tag.
10 Digital data can be shared immediately with all required stakeholders Data of cattle along with tag numbers will come after a gap of sometime
11 No Inventory to be maintained Physical inventory to be maintained and record of purchase and distribution also to be kept. Reconciliation and physical verification is also required.

At least a person is deputed to execute this activity

12 No question of unused e-tag since these are not procured from anywhere Unused ear tags generally remain with the field level persons. Collecting back those unused tags has some cost. So definite loss due to unused tags
13 No question of retagging There are 10-15% cases for retagging. Invariably retagging invites the moral hazard issue besides the extra cost.
14 No tempering is possible Tempering is possible
15 Not required to put a condition of ‘No-Tag No Claim’ in the policy ‘No tag No Claim’ condition is necessary to put in the policy
16 In addition there is solution for checking anti-selection on pure scientific and technical ground There is no standards for checking anti-selection. It is upto the veterinary doctors to exercise physically. Practically no anti-selection done in the field
17 Other parameters of cattle (health fitness) can be estimated / ascertained This is not possible with physical tag

Dr Ajay Verma

General Insurance Consultant

Chief Transformation Officer-Insurance and Advisor to the board of

Dvara E-Dairy Solutions Pvt Ltd, Chennai, India

Leave a Reply

Your email address will not be published. Required fields are marked *