Pastoralists get insurance payout for livestock deaths

One hundred families in Wajir have been compensated for livestock deaths linked to drought by a sharia-compliant insurance company.

The Sh500,000 payout is aimed lifting pastoralists out of subsistence cattle-keeping to a business where they shall stop selling cattle at throwaway prices to brokers during drought in a rush to cut losses.

Takaful Insurance CEO Hassan Bashir said the index-based Livestock Insurance product (IBLI) is aimed at giving pastoralists a fallback plan during natural hazards.

“Our goal is to show pastoralists that they can use a fair and ethical business model to protect their assets from a natural hazard in East Africa,” said Mr Bashir.

The livestock insurance conforms to the Islamic concept of takaful in which risks are shared among group members, who, through a contract called tabbaru (donation) contribute to a risk fund. It is paid out according to a member’s contribution.


The beneficiaries — 30 women and 71 men — joined the scheme in August last year in the programme run jointly by Takaful Insurance of Africa (TIA) and the International Livestock Research Institute (Ilri) with financial assistance from the UK and Australian governments.

Ilri’s programme leader of the project Andrew Mude asked the government to formulate livestock policies that make insurance products attractive to pastoralists in a sector valued at Sh46 billion.

“This payout is critical to building confidence in the concept of insurance for the pastoral, drought-prone regions of East Africa,” said Mr Mude.

Panic selling

The programme, if successful will be expanded throughout East Africa where over 70 million people rely on livestock for their livelihood.

About 4,000 pastoralists in northern Kenya have joined the insurance plan. A study by Ilri shows that the insurance is phasing out panic selling for fear of losses, thereby, reducing the threat of starvation.