A Case Study on Disaster Insurance in Kenya

Abstract

This study aims to provide a comprehensive outlook on the active disaster insurance scene in the East African country, Kenya. It begins with a geographic and economic analysis of the country followed by its historical challenges with natural disasters, namely droughts. The study is both qualitative and quantitative in nature and mostly deals with secondary sources of data. Establishing the current status of the country, the discussion brings into light the three insurance programs that have gained prominence there in the last decade: Kenyan Livestock Insurance Program (KLIP), Area Yield Index Insurance (AYII), and Kilimo Salama or Safe Agriculture. These programs use state of the art remote sensing technology to determine the availability of pasture, crop yields, etc. through standardized vegetation indices. Once the indices reach a predetermined minimum threshold, they trigger the payout mechanisms of the respective programs, economically uplifting the vulnerable communities involved and avoiding potential disaster. The programs are partially subsidized by the government which allows ease of adoption for local communities and helps stabilize the economy by keeping the agriculture and livestock sectors in balance. The study also acknowledges the limitations faced by the programs in order to provide a more realistic depiction and aims to encourage the piloting of similar programs in other developing nations like Bangladesh.

Res. Agric., Livest. Fish.8(1): 57-64, April 2021