Takaful Insurance Announces 194 Million Shillings Payout to Pastoralists

Takaful Insurance of Africa has announced a payout of about 194 million shillings for both KLIP and commercial Index-Based Livestock Insurance program to pastoralists.

The payout is to help the pastoralists in the ASAL region to mitigate the risk of forage scarcity in the current drought trigger.

Speaking during the event, Dr. Andrew Mude from ILRI said “The biggest source of vulnerability for pastoralists is losing their key source of livelihood in drought… households that take up insurance are investing more in livestock and increasingly taking part in commercial activities. This is actually working”

Through the Index Based Livestock Takaful (IBLT) that is designed to protect against prolonged forage scarcity only as a result of severe drought, Takaful is committed to making sure that pastoralist always has something to fall back to in the event of drought.

For a very long time, the pastoral community has suffered in the face of drought, losing hundreds and thousands of their livestock, their only source of livelihood with no one to hold their hand after the loss.

Speaking during the announcement, the Principal Secretary for Livestock, Dr. Andrew Tuimur, who did the official announcement said “The announcement today marks the kickoff of the massive payout to thousands of pastoralists to help them mitigate the risk of forage scarcity. This will significantly reduce the loss of livestock and the general impact of drought in the ASAL counties.”

Takaful Group CEO, Mr. Hassan Bashir put emphasis on the need to increase preventive measures towards drought-related initiatives “ The drought trigger for IBLT happens at least 3 weeks before the first animal dies, early payments allow sufficient time for the pastoralists to prepare well for the drought season. Focusing more on risk mitigation avenues would significantly reduce the loss of livestock as well as the high cost of emergency response initiatives during the drought season. Let’s keep the animals alive.”

A Brief About Takaful

Takaful Insurance of Africa Ltd (TIA) is a pioneering dynamic insurance company introducing a new and exciting ethical perspective to the insurance market in Kenya.

Takaful through the partnership with the International Livestock Research Institute (ILRI) developed the first insurance policy that combines financial risk mitigation instrument with innovative use of satellite imagery to compensate pastoralists for prevention of drought-induced losses.  The project was first piloted in Wajir in August 2013 and rapidly grew in demand and expansion to other ASAL Counties i.e. Isiolo, Garissa, Mandera, Marsabit, Samburu, Wajir, Turkana and Tana River.  IBLT was introduced to mitigate climate risk, focusing on the devastation caused by cyclical droughts in the ASAL Counties.  It provides peace of mind and continuity to livestock owners.  IBLT has since inception provided insurance for over 30,000 pastoralists for livestock worth about 1.6 billion.