Insurance literacy and general awareness on insurance is very low amongst the majority of small scale farmers as well as potential intermediaries in Kenya. This hampers the development of a private-sector driven insurance market.

 

Spreading awareness of insurance and interventions in order to improve insurance literacy among clients have been left so far to the insurance companies and their sales structures. The Insurance Regulatory Authority (IRA) is only sporadically involved.  This has obvious cost implications for the private sector. As a consequence, information has mainly been provided to support the actual sales process.

 

The government has no clear position on how to possibly deal with some of the most pertinent challenges impeding the effective spread of agricultural insurance. Some of these challenges are low insurance literacy and awareness, lack of data, the limited supply of suitable insurance products for different segments of farmers, (mostly) negative profitability of agricultural insurers, potential crowding out of insurance through government disaster financing, etc.