KENYA LIVESTOCK INSURANCE PROGRAM

Transcription

1 KENYA LIVESTOCK INSURANCE PROGRAM Progress of implementation of KLIP Richard Kyuma, PhD., OGW KLIP Program Coordinator State Department of Livestock

2 Contents Justification - Why Livetock insurance KLIP design and project area Implementation Progress Achievements Outcomes/impacts Partiners/collaborators Challenges Way forward

3 Justification for Livestock Insurance Kenya remains vulnerable to frequent and extremely expensive natural disasters; High frequency of flooding (every year) and drought (every 2-4 years); : Government of Kenya spent on average KES 4.2 billion on post-disaster relief per year; : Total drought losses to Kenyan economy: KShs billion and reduction of GDP by 2.8% each year. 72% of this loss is related to livestock; Severe droughts lead to about 20% mortality of livestock;

4 Centrality of Livestock Economy and Risk Profile Livestock is the principle asset and key source of income Data source: Project baseline 2009 (924 Marsabit Households)

5 KLIP Establishment JUBILLE GOVERNMENT MANIFESTO The Manifesto of the current government; Cushioning pastoralists against severe drought is a flagship program of the Government of Kenya MOTION AND A BILL OF PARLIAMENT The Motion of the National Assembly of 13 th July The National Assembly passed a motion on 13th July 2013 to implement a livestock insurance scheme to cushion pastoralists from effects of drought. Adapted from ILRI s IBLI

6 KLIP Design Designed to use forage availability as determined by satellite data - Normalized Difference Vegetation Index (NDVI) to determine whether to pay; Following the ILRI designed IBLI Currently the National government provides 100% premium support for 5 tropical livestock units (TLU) belonging to vulnerable pastoralists The insurer and beneficiaries will make arrangements for desired additional cover The insuring company makes payouts directly to the accounts of the beneficiaries when there is a trigger

7 Use of Satellite Data Generation of Relevant Satellite Data (NDVI) 1-10 May May 2011

8 Legend for the state of KLIP/IBLI Index The KLIP color legend below describes the state of the index in a simple and easy to understand format. Green Yellow Orange Red Black Good forage availability. Represents between 65 th -100 th percentile of forage conditions over time. This is above normal and stable forage condition. Forage conditions fall between 45th to 65 th percentiles. Here, the forage situation is around or slightly above normal. Forage conditions are between 30 th and 45 th percentile. The division in question is below long term average but conditions are not yet serious. Forage condition is between 20th 30 th percentiles. Drought situation is serious but not yet classified as severe. At this stage, indemnity will have NOT been triggered. Severe drought conditions. Forage condition are below the 0-20 th percentile. Indemnity payout have been triggered.

9 KLIP Coverage The Program is to cover 14 ASAL Counties of Turkana, Wajir, Marsabit, Isiolo, Tana River, Mandera, West Pokot, Baringo, Garissa and Samburu Laikipia, Narok, Kajiado and Lamu Upto September 2017, six counties of Turkana, Wajir, Marsabit, Isiolo, Tana River, Mandera were under cover. Currently insurance contract for 8 counties including Garissa and Samburu and samburu has been signed and took effect from October, 2017 On Average 2000 households covered in each county except, Turkana, Wajir ; Tana River and Marsabit with 2500 HHs each. Cover for 5 TLUs per Household

10 KLIP Progress and Achievements Progress The Program started from 1 st July, 2014 Training and awareness creation has been carried out at national and county levels Sensitization meetings have been carried out in all 14 ASAL counties Recruitment and registration of in Turkana, Wajir Marsabit, Isiolo, Tana River, and Mandera, Garissa, Samburu West Pokot and Baringo

11 KLIP Progress and Achievements Progress First insurance contract was signed by the SDL and APA led consortium of insurance underwriters in 2015 at a cost of Kshs. 58,393,734 covering Turkana and Wajir Counties. The second KLIP insurance Contract was signed in 2016 covering 14,000 households with 70,060 livestock units (TLUs). It was also signed by APA led consortium of insurance underwriters and it is running up to 31st Oct Cost of premiums was Kshs. 164,440,734 A third KLIP contract to cover 8 counties, 18,000 household, 90,060 TLUs was signed with Takaful insurance in 2017 for a period of one year. Cost of premiums was Kshs. 246M

12 KLIP Progress and Achievements Achievements Short Rains season (October-December 2017) 50 insurance units of 90 (in 7 counties) triggered. Kshs. 175m insurance claims payments to be paid to 9,700 beneficiaries. Long Rains season (March-June 2017) 55 insurance units of 70 (in 6 counties) triggered. Kshs. 319m insurance claims payments to be paid to 11,407 beneficiaries. Short Rain season (Oct Dec 2016) - 62 insurance units out of 70 (in 6 counties) triggered. Kshs. 215m insurance claims payments were done for Short Rain (SR) 2016 season covering 12,000 beneficiaries. August, 2016 Long rains season: - insurance claims paid in two insurance units in Wajir County Kshs. 3.5 million paid to 275 pastoralists/beneficiaries.

13 KLIP OUTCOMES Improved access to forage during periods of shortage Enhanced access to water for animals during dry periods Improved vet services after payouts Overall improvement in pastoral drought mitigation

14 Impacts and evidence that KLIP contributes to food security and builds resilience in pastoral communities 1. A 33 percent reduction in reliance on food aid 2. A 36% reduction in likelihood of distress livestock sales 3. A 25 percent reduction in likelihood of reducing the number of meals as a coping strategy 4. Insured households invested more in veterinary and vaccine services during both drought and non-drought periods

15 Impacts and evidence that KLIP contributes to food security and builds resilience in pastoral communities 5. Insured households generated higher milk productivity and incomes and had better child nutrition than noninsured households. 6. A positive impact on important indicators of well-being, including greater household income per adult equivalent (AE) and improvements to mid-upper arm circumference (MUAC), a strong predictor of child malnutrition. 7. Insured herders were more likely to reduce their overall herd sizes

16 Satellite Data: December, 2015, NDVI Results Short Rains No trigger No Pay Out

17 Long Rains Season cumulative Report: (Mar, April, May and June, 2016) Two insurance units in Wajir (Diff and Bute) have triggered Unit Area of Insurance No. of Beneficiaries Payout Amount DIFF 179 2,295,496 BUTE 96 1,231,104 TOTAL 275 3,526,600

18 PAYOUT MAP Short Rains 2016 SUMMARY PAYOUTS Units paid 62 Units non-paid 8 Average Payout 25% Nr. Units - Full Payout 16 Nr. Units - Approx 30% 18 Nr. Units - Approx 15% 21 Nr. Units - Min Payout 7 Total payouts KES 215M Beneficiaries receiving payouts 12,000 Total Number of beneficiaries 14,000

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20 Total Sum Insured per beneficiary (KES) 70,000 Allocation sum insured to short rains (LRS) 58% Maximum Payout/ Beneficary (KES) 40,600 Minimum Payout/ Beneficiary (KES) 12,600 Beneficiaries receiving payouts 12,064 Total amount of payouts 319,191,600 Total Number of beneficiaries 14,010

21 Presentation of cheque for KLIP payouts, October 201

22 KLIP SHORT RAINS 2017 KLIP SR PAYOUT AMOUNT AND NO. OF BENEFICIARY County Registered Beneficiaries Total Payout Beneficiaries Receiving Payouts Amount Turkana Wajir ,827,107 Mandera ,326,046 Marsabit ,100,581 Isiolo ,898,801 Tana River ,695,958 Garissa ,065,413 Samburu ,193,500 Total ,107,406

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24 Annual GoK treasury allocations to KLIP Year 14/15 15/16 16/17 17/18 Total Budget (Ksh. m) Premiums Budget (Ksh. m) % Investment premiums % Capacity building, O&M Two year GoK premium payments of Kshs. 460 m against Insurance payouts of Kshs. 705m VALUE FOR INVESTMENT!!!

25 GoK Projected KLIP Investment plan Year 14/15 15/16 16/17 17/18 18/19 19/20 Total Budget (Ksh. m) **** 300 1,200 1,200 Premiums Budget *** % investment premiums % Capacity building, O&M Max Potential Payout in Ksh. m ** ,300 4,900 4,900 H/H 5,012 8,280 14,000 18,000 50,000 50,000 No of people 30,072 49,680 79, , , ,000 % of Human Pop in ASAl Livestock units covered Value livestock protected( Ksh. M) ,060 41,400 70,000 90, , ,000 1,253 2,070 3,323 5,500 12,500 12,500

26 KLIP Collaborators and partners National and County governments: Premium purchase, awareness creation, recruitment and follow-up of beneficiaries. Counties can also provide matching funds World Bank and International Livestock Research Institute: Insurance tool development, building of capacities at national and county levels and other technical support on NDVI insurance Insurance Regulatory Authority: Product approval and collaboration in pastoralists awareness creation Insurance companies: They underwrite the drought risk and collaborate in awareness creation.

27 A functional Public private partnership Roles of National and County Governments Creation of conducive policy and business environment Coordination Resource mobilization Capacity building of stakeholders Private sector mobilization Development of support infrastructure like sale yards, strategic feed store, ICT systems

28 Role of County Governments Extension/outreach services Data collection and management Selection of insurance beneficiaries Aligning programs to complement livestock insurance Role of Private Sector/Insurers Provision of Insurance cover Awareness creation, Marketing, Recruitment of voluntary cover Disbursement of payouts

29 KLIP insurance products To date: Gok Fully subsidized cover Going forward: Voluntary insurance services Partial subsidies Fully Voluntary/commercial products

30 Challenges Low and Unpredictable funding levels Low awareness creation and Low capacity building levels Beneficiary recruitment and data management challenges High premiums Slow payout pathways

31 Way Forward Enhancing knowledge on index insurance among key stakeholders to enhance investment in insurance and its uptake; Entrench livestock insurance implementation structures at the two levels of Government; Establish a livestock insurance electronic system for managing the pastoralists data ; Streamline Payouts responsibilities. Develop local capacities in calculating agent services Sustainability: Development of partial subsidy to purely commercial products. Continuous research for product fitness

32 THANK YOU