Climate change mitigation: Flood insurance scheme launched to protect small farmers in Kenya

Farmers, experts welcome move, call it ‘game changer’

By Tony Malesi
Published: Friday 12 May 2023
Photo: iStock__

Smallholder farmers in Kenya who fall victim to floods will soon be indemnified with recovery funds almost immediately after the disaster, according to officials.

Swiss Re, a global reinsurer keen on helping developing countries build climate resilience, has unveiled an index-based flood insurance scheme to cushion farmers in the eastern African nation.

To successfully execute the programme, the reinsurer has partnered with Britam, a leading financial service provider in Africa, and Oxfam, a UK charity fighting global poverty.

The pilot programme was launched in Tana River County, one of the common flood-prone regions in Kenya, with national rollouts expected in due course.

The parametric flood solution was developed using data modelling and satellite imagery to predetermine floodwater thresholds and provide indemnity at an affordable cost.

The director of emerging consumers at Britam, Saurabh Sharma, said the system uses water level data to determine historical flooding patterns of a region for assessing premiums and indemnity.

“This innovative idea has been designed using long-term average data on rainfall and water levels in flood-prone areas like the Tana River region as parameters to pay claims,” said Sharma in a statement to the press.

“Considering these parameters can be monitored remotely, Britam will be able to pay flood-related claims swiftly. This will help in supporting the local government and other aid organisations in their flood mitigation efforts,” he added.

Flash floods and other extreme weather events have become quite frequent in Kenya due to climate change, according to experts. 

The experts are, however, optimistic the index-based flood insurance solution is a game-changer, especially for populations that live in flood-prone areas but lack access to conventional property insurance schemes.

Floods have affected millions of people in Kenya, resulting in thousands of deaths and displacements, according to organisations offering humanitarian assistance such as the United Nations and the Kenya Red Cross.

“Due to climate change, events like floods have become quite frequent,” said David Abudho, Social Protection Strategist at Oxfam Kenya.

“We hope the stakeholders will lend their support to replicate and scale up this innovative solution so that the most vulnerable households across the country can be protected against the burden of floods,” he added.

Designing the index-based flood insurance scheme had the input of other partners and experts, including AB Consultants and Risk Shield. 

The insurance solution underscores the importance of collaboration between different organisations and the incorporation of technology in finding solutions to climate disasters.

The insurance solution is timely since it will help reduce the impact of floods and protect vulnerable households and businesses still recovering from the impacts of the worst drought in 40 years and the COVID-19 pandemic, according to experts.

Ordinary farmers have embraced the idea and can’t wait for the programme to be rolled out in their localities, especially when the Horn of Africa is facing flash floods.

James Maina, a small-scale farmer in Kenya’s Kiambu County, said flood insurance cover is long overdue and will go a long way in helping farmers recover after disasters.

“Marginalised communities or groups like smallholder farmers are the biggest victims of natural disasters due to extreme weather events like floods. It gets even worse because they have little to no savings to recover after a loss. Assistance from the government is always little or delayed. Hence, we welcome the innovative flood insurance scheme,” said Maina.

Maina, who sells vegetables and groceries, added that the insurance cover is a game-changer, considering its immediate indemnity. 

“Now that the scheme will provide funds for recovery immediately after a flood disaster, farmers will recover and move on faster. In case of farming fields getting marooned and crops swept away, farmers will not incur major losses as always happens,” he said.

Alice Wairimu, a cereals wholesaler in Nairobi, said the government should emulate the private sector in rolling out innovative programmes like flood insurance coverage to help reduce the pain of floods and other extreme weather disasters.

“With increasing frequency and severity of extreme weather impacting communities, it is crucial that authorities take steps to protect the most vulnerable. Most of the current flood recovery options don’t suit the needs of vulnerable populations,” said Wairimu.

Wairimu said there must be deliberate efforts to make it easy to access post-disaster recovery funds besides insurance funds to boost food security.

“Also, there are many lessons that can be learnt from this innovative product, especially to organisations keen on helping low-income communities recover faster after floods and other disasters,” she added.

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