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

2. 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.

3. 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

4. The ASAL’s of Kenya & Potential Kenya ASAL’sLivestock 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

5. 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;

6. 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.

7. 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.

8. 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

9. 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.

10. 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.

11. 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.

12. 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.

13. THANK YOU