KENYA LIVESTOCK INSURANCE
PROGRAM
‘Convergence of Public Policy, Research and Private Sector
Innovations’
By Vincent Githinji
9th June 2015

Introduction
• 56% of the country’s population is food
insecure;
• 2 million Kenyans are constantly on food relief
and up-to 4 million whenever rains fail;
• In ASAL livestock is the main source of
livelihood and hence the need to protect this
resource;
• Food aid, emergency livestock off-takes and
re-stocking are a drain on financial resources.

Impact of disasters
• Kenya remains vulnerable to frequent and extremely
expensive natural disasters;
• Frequent disasters have repeatedly caused catastrophic
damage to the Kenyan agriculture sector;
• High frequency of flooding (every year) and drought
(every 3-4 years);
• 2000 – 2011: Government of Kenya spent on average
KES 4.2 billion on post-disaster relief per year;
• 2008 - 2011: Total drought losses to Kenyan economy:
KShs 968.6 billion and reduction of GDP by 2.8% each
year. 72% of this loss is related to livestock.
• Severe droughts results in upto 10% mortality of
livestock

The ASAL’s of Kenya & Potential
Kenya ASAL’s Livestock Wealth
• 14 target ASAL pastoral
counties have;
• 9.140 M cattle= 52.3%
• 13.462M sheep= 78.6%
• 21.024M goats= 75.8%
• 2.962M camels= 99.7%
• This is a huge livestock
wealth

Policy Perspective
• Various policies provide for resilience building
interventions;
• Vision 2030- Strategies to commercialize
agriculture and creation livestock disease free
zones;
• ASDS (2010-2020)- greater focus on ASAL’s;
• Sessional Paper No. 1 of 2012 on National
Food and Nutrition Security Policy- address
productivity, access and quality of food;

Policy Perspective
• Sessional Paper No. 8 of 2012 on the National Policy
for the Development of Northern Kenya and other Arid
Lands- outlines measures to unlock the potential of the
arid areas;
• Sessional Paper No. 2 of 2008 on the National Livestock
Policy- reviewed to include interventions for resilience
building through insurance;
• Draft Agriculture Policy- recognize the need for and the
role of private sector in agricultural insurance;
• Manifesto of the current government provides for
insurance to cushion pastoralists against effects of
drought.

Livestock Insurance as a risk
management tool
• The MALF plans to use insurance to cushion
Kenya’s livestock keeping communities against
drought related loss of livestock;
• KLIP has been developed with support from
World Bank, ILRI, and public and private sector
stakeholders;
• It is a macro-level insurance scheme for asset
protection;
• It uses Normalised Data Vegetation Index (NDVI)
for development of insurance tools/products.

Objectives of KLIP
• The overall objective is to minimize risks
emanating from drought-related disasters and
build resilience of pastoralists for enhanced
and sustainable food security

Specific Objectives of KLIP
• To build capacities of the pastoral communities and
stakeholders on the use of insurance for the reduction of
weather related risks and rebuilding of livelihood support
systems;
• To develop and apply index based insurance products in the
provision of livestock insurance services to the vulnerable
pastoralists;
• To increase Public-Private-Partnerships (PPP) in the provision
of index based livestock insurance to the vulnerable
pastoralists whose livelihoods are dependent on livestock;
and
• To improve coordination of pastoral livelihood support
programmes through creation of linkages and overall
coordination.

Design of the KLIP
• Forage availability as determined by satellite data
will trigger payout;
• National government intends to provide (as a
start) 100% premium support for 5 tropical
livestock units (TLU) belonging to vulnerable
pastoralists;
• The insurer and beneficiaries will make
arrangements for top up and voluntary cover;
• The insuring company will make payouts directly
to the accounts/mobile payment systems of the
beneficiaries when there is a trigger.

Partnerships in KLIP
• Situation analysis, concept design/NDVI insurance
tool- ILRI and World Bank;
• Awareness creation/extension- county
governments, ILRI, IRA, Insurers;
• Underwriting- Insurers;
• Payment distribution and data management-
NDMA, Banks, Insurers and mobile service
providers;
• Policy framework and development of
complementary risk management programs-
National/County governments.

Moving to the Future. Thoughts!!!
• Development of fodder markets and commercialization
of fodder production;
• Investment by county governments in insurance;
• Need to increase presence of insurers in the ASAL’s;
• Long term-sustainability should be considered by
encouraging top-up and voluntary cover;
• Development of payment distribution system outside
the 4 HSNP counties;
• Development of capacities for public agencies and
insurers on index insurance tools;
• Accurate and timely information dissemination on
trigger/payout.

THANK YOU