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Index-Insurance for Pastoralists in Northern Kenya

Published: 13th September 2012 12:56Last Updated: 10th February 2016 16:53

In Dirib Gombo, farmers receive payouts from livestock insurance (photo credit: Neil Palmer/CIAT).

As livestock deaths mount, a small group of herders in Kenya’s Marsabit District is first to benefit from a program that tracks forage conditions via satellite. In the midst of a drought-induced food crisis affecting millions in the Horn of Africa, an innovative insurance program is providing compensation for some 650 insured herders in northern Kenya’s vast Marsabit District who have lost up to a third of their animals.Known as index-based livestock insurance, payouts are triggered when satellite images show that grazing lands in the region have deteriorated to the point that herders are expected to be losing more than 15% of their herd. 

The insurance project was developed in partnership by the Nairobi-based International Livestock Research Institute (ILRI), Cornell University and the Index Insurance Innovation Initiative program at the University of California at Davis. Commercial partners Equity Bank and UAP Insurance Ltd implement the program. The IBLI project is funded by the United States Agency for International Development, the European Union, the British Government, the World Bank, the Microinsurance Facility and the Global Index Insurance Facility.

One major success thus far is that the livestock mortality index that is at the heart of the program appears to be working. The fatality rate predicted by the satellite assessments of forage loss is tracking very closely surveys of animal deaths on the ground. This accuracy is crucial because using freely available satellite images of pasture lands to accurately predict animal deaths overcomes a major barrier that has bedeviled past efforts to provide livestock insurance in poor regions: the prohibitively high costs and logistics of confirming animal deaths in herds that roam across vast distances in extremely remote areas.

Although still a work in progress, the fact that this relatively inexpensive approach to estimating livestock deaths seems to be accurate could open the door to making livestock insurance widely available in many parts of Africa.