Unpacking Climate Risk Insurance In Kenya

By Soko Directory Team / Published December 1, 2023 | 9:15 am





Last July was the second hottest month on record for the globe with scientists marking 2023 as the hottest on record that could usher in the eventual return of the El Nino weather phenomenon come 2024.

In Kenya, experts are calling for more caution. On August 23, 2023, a local publication quoted Kisumu County Climate Change Director, Evans Gichana saying, “Climate change portends a grim future for Kenya and is a wake-up call for all of us to take urgent action to mitigate the effects of climate change.”

To illustrate this further, Northern Kenya has witnessed severe droughts that have caused loss of life and livelihoods. Western Kenya, on the other hand, has suffered floods that have resulted in dislocation of populations, damage to livelihoods, and loss of farmlands. All these calamities contributed to a severe drop in harvests in turn hurting Kenya’s ability to feed its people. This has in turn forced the country to bring in food imports to bridge the deficit thereby placing an additional strain on the country’s foreign exchange reserves.

With most climate-related catastrophes becoming regular, it is important to find an effective way to mitigate the risks, especially a solution that helps affected sectors bounce back. This is best handled by climate risk insurance. Climate risk insurance involves providing insurance cover that not only addresses the immediate aftermath of climate-related disasters but also proactively meets the financial burdens they impose in times of calamities such as floods, drought, and earthquakes, as well as crop and livestock diseases.

Under climate risk insurance, insurance companies work with policyholders to reduce the likelihood and severity of such events. Insurers achieve this by encouraging policyholders to invest in infrastructure and practices that are resilient to the impacts of climate change. For example, a business might be prompted to build structures that can withstand stronger storms or install systems to manage increased water levels.

Another example of how climate risk insurance has been used to mitigate such risks and enhance community resilience in the face of climate risks is the launch of the Kenya Livestock Insurance Program in 2015. The program was implemented in six counties including Turkana, Wajir, Marsabit, Isiolo, Mandera, and Tana River counties. In 2017 alone, the program disbursed a total of KSh. 494 million to support affected pastoralists. These disbursements played an important role in enabling farmers to procure essential resources such as animal feed, medications, and water for their livestock thereby saving their livestock from imminent death.

Additionally, with the review of the Crops Act 2013, crop development, pest and disease control, climate change resilience and establishment of crop insurance have been given prominence while the Livestock Policy, 2020 advocates for increased access to insurance by value chain players to mitigate against inherent risks in livestock production systems. This cover is important for farmers to mitigate the impact of threats and ensure the resilience and sustainability of farming practices and livelihoods.

As interest in microinsurance products to mitigate climate change gains momentum, private insurance providers have in the process found ways to enhance interaction between livestock keepers and livestock experts to encourage their active participation in commercial livestock keeping.

It is thus clear that mitigating the impact of droughts and floods through climate risk insurance necessitates not only short-term emergency responses but also long-term resilience-building efforts such as investment in water management, drought-resistant crops, improved irrigation systems, early warning systems, and disaster preparedness.

Understandably, there is a need to create awareness of climate risk insurance. Through transparency, accessible information, and a commitment to risk reduction, insurers can pave the way for a strong climate risk insurance system that empowers individuals and communities to navigate the challenges of a changing climate with confidence while breaking the cycle of vulnerability.

Read Also: Bamburi Cement Unveils Its Climate Action Progress

Francis Maina is the General Manager – Minet Risk Services (Corporate) at Minet Kenya




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2024
  • January 2024 (238)
  • February 2024 (226)
  • March 2024 (11)
  • 2023
  • January 2023 (182)
  • February 2023 (203)
  • March 2023 (322)
  • April 2023 (298)
  • May 2023 (268)
  • June 2023 (214)
  • July 2023 (212)
  • August 2023 (257)
  • September 2023 (237)
  • October 2023 (266)
  • November 2023 (284)
  • December 2023 (176)
  • 2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (358)
  • April 2022 (292)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (232)
  • December 2022 (167)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (272)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950