Index-based livestock insurance is designed to cater for pastoral communities in the arid and semi-arid lands (ASALs) of Northern Kenya. Currently the project is being implemented in Marsabit Northern Kenya. The target clients are individual pastoralists; both large and small scale. Since the pastoral livestock depend on the pastures as the only source of food, an index -based livestock insurance that monitors the forage availability through satellites and relates this to livestock deaths was picked as the best option.
Livestock insurance is critical in drought-prone countries like Kenya. In 2011, Kenya suffered one of the worst droughts in its history which killed up to 30% of the country's livestock in some of the divisions in Northern Kenya. The Government of Kenya (2000) indicates that 60% of Kenya’s livestock are found in the pastoralist land, valued at approximately $6 billion, with an annual milk value of between $67 - $107 million.
Insurers: APA Insurance (Kenya)
Reinsurers: Africa Re, Swiss Re
Delivery Channels: community leaders
3,666 pastoralists (cumulative - retail only)
livestock index insurance (camels, cattle, goats, sheep)
3.25%-5.5% (GIIF covering 40% of premium)
$1.63 million (cumulative)
A recent annual survey of 925 households randomly selected indicated that households that purchased insurance had:
The survey has been conducted for the past four years and positive results for households with insurance have remained consistent.
ILRI’s pilot success has been supported by ICT-based cell phones with an offline mode used for sales, and partnerships with development NGOs in the area such as CARE, who assist us in consumer education on insurance.
The arid and semi-arid lands (ASALs) of Northern Kenya are very difficult to work in logistically, and there is disruptive fighting in many districts. Distribution channels are insufficient. ILRI is working with local shopkeepers to act as the sales agents since financial institutions in the area do not have presence in the villages. The potential clients are mostly illiterate and have had little or no previous experience with formal insurance.
ILRI is expanding its work to other districts in Northern Kenya, including Isiolo and Wajir, as well as Southern Ethiopia.