Insurers eye share of Sh1.3bn livestock insurance cover

Insurers are bidding for Sh1.26 billion livestock cover as the State seeks to protect arid and semi-arid area (ASAL) farmers from the negative impacts of drought that has in recent past killed animals such as cows.

The state department of livestock has opened a bid for insurance tender that seeks to ensure livestock farmers in eight ASAL counties are given payouts of up to Sh70,000 to buy fodder in case drought strikes.

Insurers are required to bid for the premiums that they expect the State to pay on behalf of the 18,012 households that are expected to benefit from the cover.

The premiums cover five tropical livestock units (TLUs). One TLU is equal to one mature cow, 0.7 of a camel or 10 goats or sheep.

“The cover is an asset protection to provide payouts to pastoralists for purchase of fodder to keep their livestock alive,” says the Ministry in tender documents.

“In the event of a trigger, payouts shall be transferred to the bank accounts or mobile payment systems of the registered beneficiaries.”

The cover was first rolled out in Wajir and Turkana in 2014/2015 financial year and has now been extended to Mandera, Marsabit, Isiolo, Tana River, Garissa and Samburu.

“The overall objective of Kenya Livestock Insurance Program is to minimise risks emanating from drought-related disasters and build resilience of pastoralists for enhanced and sustainable food security,” says the ministry. The unique cover will run for a year but with window for a two-year extension.

Government will fully pay the premiums in the first year but cut that to half thereafter.