Index-based livestock insurance in Kenya and Ethiopia

In the report “Scaling up index insurance for smallholder farmers: recent evidence and insights” (2015, 30pp) brought out by the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS), the fifth case study is on index-based livestock insurance for pastoralists in Kenya and Ethiopia. ILRI (International Livestock Research Institute), in partnership with Cornell University and University of California–Davis, sought to stabilise asset accumulation and enhance economic growth by setting up a system whereby pastoralists could insure against the loss of their livestock because of drought. The insurance system operates in Marsabit, Isiolo and Wajir in northern Kenya and in the Borana region in southern Ethiopia.

The case study shows how several technological, structural and financial challenges to the insurance system were overcome. Adapting the index design to incorporate client feedback enabled a more client-driven process that the pastoral communities may be more willing to trust.

It was interesting to note that, although women rarely own livestock or attended public meetings where information about the insurance was disseminated, they bought more insurance cover than did men. This may be because women i) have more liquidity as they participate in petty trade; ii) are more risk adverse; and/or iii) are more open to innovation. Project partners intend to research this further.


Posted on 29 January 2015 in Pastoral Research & Innovation, Pastoralist Livelihoods & Nutrition