Insurance payout helps herders save drought-stricken livestock in Kenya

The government of Kenya is paying about USD 2 million to 12,000 pastoral households across six counties via a pioneering livestock insurance program reinsured by Swiss Re. The program uses satellites to monitor vegetation available to livestock, and triggers financial assistance for feed, veterinary medicines and water trucks when drought gets so bad that animal lives are at risk.

Livestock are a major element of the Kenyan economy. Between 2008 and 2011, livestock losses in Kenya accounted for 70 percent of the USD 12.1 billion in damages caused by drought.

Kenya’s Ministry of Agriculture, Livestock and Fisheries developed the Kenya Livestock Insurance Program (KLIP) with technical assistance from the International Livestock Research Institute (ILRI), the World Bank Group, and Financial Sector Development (FSD) Kenya. KLIP is now part of Kenya's national strategy to end drought emergencies. The insurance program is a public-private partnership between the government and a consortium of seven insurance companies: UAP, CIC, Jubilee, Heritage, Amaco and Kenya Orient, under the leadership of APA Insurance, reinsured by Swiss Re.

Payments scheduled by end of the month

Pegged to measurements of forage conditions made via satellite for each area, the payments will be made by the end of February 2017. The average payment amounts to around USD 170 per household. The funds can help save 70,000 tropical livestock - primarily cows, goats and camels - that in turn sustain approximately 100,000 people across the counties of Turkana, Wajir, Mandera, Marsabit, Isiolo and Tana River.

APA Insurance will pay funds directly into the pastoralists’ bank accounts or through mobile phone accounts, on behalf of the consortium. Mobile insurance is an increasingly popular and convenient way to conduct financial transactions in Kenya, especially in the country’s most remote areas. Those without accounts will receive cheques.

“This is the largest livestock insurance payout ever made under Kenya’s agricultural risk management program and the most important as well, because without their livestock, pastoralist communities would be devastated,” said Willy Bett, Cabinet Secretary for Kenya’s Ministry of Agriculture, Livestock and Fisheries. “This insurance program is not just an effective component of our national drought relief effort. It’s also a way to ensure that pastoralists can continue to thrive and contribute to our collective future as a nation.”

KLIP a role-model for the rest of Africa

Esther Baur, Director, Swiss Re Global Partnerships EMEA said: "KLIP provides an important safety net to Kenyan herders who for centuries have grazed their animals across vast stretches of arid and semi-arid lands. The programme highlights Kenya's pioneering role in providing financial drought protection for its people. This public private partnership combines local engagement and expertise with global financial strength and we see it as a role-model for the rest of Africa, and beyond."

"The government and its partners have brought the latest technological and financial tools from a group of committed and innovative private sector players to functionality. The payouts prove that the program is delivering a financial safety net where it is most needed," concluded Lovemore Forichi, Swiss Re's Head of Agriculture Reinsurance Africa.