1
REPUBLIC OF KENYA
MINISTRY OF AGRICULTURE, LIVESTOCK, FISHERIES AND
COOPERATIVES
NATIONAL AGRICULTURAL
INSURANCE POLICY
(NAIP)
April 2021
i
REPUBLIC OF KENYA
National Agricultural Insurance Policy
(NAIP)
Ministry of Agriculture, Livestock, Fisheries
and Cooperatives Kilimo House,
Cathedral Road,
P. O. Box 30028 – 00100,
Nairobi, Kenya.
Tel. +254-20-718870
E. mail :csagric@kilimo.go.ke
Website: www.kilimo.go.ke
© Government of the Republic of Kenya, 2021
ii
FOREWORD
Kenya’s economy is predominantly dependent on agriculture in terms of its
contribution to the Gross Domestic Product, employment, provision of raw
materials and foreign exchange earnings. The sector directly contributes 34.1
percent of the country’s Gross Domestic Product and additionally 27 percent
through manufacturing, distribution and service-related sectors. The
Government has therefore outlined the key role the agriculture sector will
continue to play under the economic pillar of the Kenya Vision 2030 and in the
Agricultural Sector Growth and Development Strategy (ASGTS). The strategies
outlined in these two key documents aim at accelerating the growth of
agriculture sector in order to improve the standard of living of Kenyans as well
as substantially improving their food and nutritional security.
The agriculture sector is however, increasingly becoming vulnerable to vagaries
of weather- related risks that adversely affect the sector and the general
economy. Further, Climate change has aggravated the vagaries of weather
resulting in extreme events such as droughts, floods and, increased incidences of
pests and diseases. The Government has consequently identified and adopted
Agriculture insurance as one of the ways to de-risk the agriculture sector and
reduce vulnerability of farmers. However, the private sector undertaking
agricultural insurance has been reluctant to fully embrace the sector due to
attendant risks. The uptake of insurance by farmers has consequently remained
low.
The purpose of this policy is to outline measures that, if implemented, will
foster the growth and development of agriculture insurance in the country. It
endeavors to identify the salient relationships and linkages between the key
stakeholders in the Agriculture Insurance industry, as well as providing a
framework to guide specific policy actions/interventions key one being the
development of affordable and accessible agriculture insurance. In addition, it
offers policy makers and the private sector a coherent direction to guide
coordinated performances and implementation of the policy. It will also provide
a platform for the regulator to effectively act on enforcement for smooth
operations of the industry.
Hon. Peter Munya,
EGH CABINET
SECRETARY
MINISTRY OF AGRICULTURE, LIVESTOCK, FISHERIES AND
COOPERATIVES
iii
PREFACE
The large majority of farmers in Kenya remain vulnerable to natural disasters, a
fact that poses significant social and economic challenges. Severe drought
strikes the northern part of the country every 3 to 5 years causing major losses.
For instance, during the extreme drought event that occurred between 2008 and
2011, the Kenyan economy lost an estimated US$12 billion with the Livestock
sub –sector alone incurring 72 percent of this loss. Such devastating shocks
push better of farmers and pastoralists into poverty and the already poor into
destitution, which may take them several years to recover. This also makes it
more costly or impossible for these farmers to take loans thus limiting
opportunities to agricultural producers to invest in better tools and technologies
to increase productivity.
Agriculture insurance offers opportunity for Kenya address and manage the
risks associated with agriculture. The agriculture insurance market in Kenya has
failed to reach scale. With the exceptions of some small-scale pilots and niche
retail activity, the private is currently not providing agriculture insurance to a
large scale. This can be attributed to various reasons, which include lack of
capacity especially for catastrophic risks. Insurers do not have the capacity to
underwrite catastrophic risks associated with drought, floods and other typical
agricultural shocks.
Although reinsurance is available, it is usually expensive particularly where lack
of reliable data. Secondly, smallholder farms tend to be spread over wide areas
and this makes agriculture insurance to carry high distribution costs; this s
exacerbated by lack of established insurance agent networks in rural areas. In
addition, in relation to tradition indemnity insurance, the cost of assessing losses
is relatively high. This is especially true for small-insured farm units, where the
premium volume generated is low and therefore insufficient to cover the costs
of loss assessment. Finally, although index-based insurance lowers transaction
costs, it carries with it high development and other start-up costs. These start-up
costs eventually translate into expensive premiums thus making smallholder
farms unable and to pay for these commercially priced agricultural insurance
products. In addition, farmers have poor understanding of agriculture insurance
and this reduces demand and at times may result in purchase of inappropriate
products.
Agriculture insurance therefore, if implemented through partnership between
iv
the public and the private sector can reduce losses along the various agricultural
value chains and help smoothen agricultural incomes. Agricultural insurance
will also provide the much-needed protection for agricultural producers;
especially the vulnerable populations, farmers, livestock keepers and fisher folk,
thereby keeping them out of extreme poverty and enabling them improve
investments in agriculture and increase food production to address national food
security and increased incomes.
Lastly, we wish to affirm our commitment to mobilize adequate human and
financial resources to implement this policy. We therefore call upon the
financial and insurance sectors, the private sector and all stakeholders to join to
partner and collaborate with government at the national and county level to
support the implementation of this policy.
Prof. Hamadi Boga, (PhD), CBS.
PRINCIPAL SECRETARY
STATE DEPARTMENT FOR
CROP DEVELOPMENT AND
AGRICULTURAL RESEARCH
Mr. Harry Kimtai CBS
PRINCIPAL SECRETARY
STATE DEPARTMENT FOR
LIVESTOCK
Prof. Micheni J. Ntiba PhD, DBA,
CBS,
PRINCIPAL SECRETARY
STATE DEPARTMENT
FOR FISHERIES
AQUACULTURE AND
THE BLUE ECONOMY
Mr. Ali N. Ismail, C.B.S.
PRINCIPAL
SECRETARY
STATE
DEPARTMENT FOR
CO- OPERATIVES
v
EXECUTIVE SUMMARY
The Agriculture Sector has recorded impressive growth since independence
though many challenges persist in achieving food and nutrition security;
transforming agriculture from subsistence to commercial production; improving
access to markets; efficient use of inputs and accessing agricultural credit and
insurance among others. Risks and uncertainties are inherent in agricultural
production systems as producers are exposed to various disasters owing to
vagaries of weather, biological perils that include pests and disease outbreaks,
idiosyncratic risk such as hail and fire and systemic risks covering large areas.
These disasters severely disrupt agricultural production resulting in vulnerability
of producers and other value chain actors.
The Government has identified agriculture insurance as one of the ways to de-
risk the agriculture sector and reduce vulnerability of farmers and other value
chain actors. However, agriculture the adoption of agriculture insurance in the
country has a risk mitigation measure has failed to reach scale due to many
challenges. These include Inadequate risk assessment and profiling; inadequate
capacity for risk assessment and profiling; inadequate and unreliable data for
agriculture insurance; low levels of agriculture insurance market infrastructure
development; inappropriate product distribution channels; inadequate capacity
by underwriters to cover risks; high cost of insurance premiums; inadequate
incentives by government and weak legal and regulatory framework that does
not respond to industry needs.
The agriculture insurance has however been operating without a comprehensive
policy to guide its growth and development and this informs the Government’s
quest to have one in place. The agriculture insurance Policy forms the
conceptual framework that provides guidelines for addressing the challenges in
the agriculture insurance sub sector and exploiting the opportunities to bring
greater competitiveness and spur economic growth. The overall objective of the
agriculture insurance policy is therefore to foster growth and development of
agriculture insurance industry and thus adequately remunerates all value chain
actors.
The effective implementation of the National Sugar Policy will result in
achievement of specific outcomes that include: improved coordination amongst
institutions and an enabling environment that fosters the growth and
vi
development of agriculture insurance; improved development of affordable and
accessible agriculture insurance; enhanced the capacity of agricultural value
chain actors to enable them cope with risks; generation and use of data to
support agriculture insurance and promote research and development,
innovation and knowledge management in agriculture insurance.
Policy implementation will require proper coordination of institutions and
stakeholders in the industry to implement the outlined policy intervention
measures. To achieve a vibrant agriculture insurance, an enabling legal and
regulatory framework and fiscal measures such as public premium support and
other incentives shall be provided. In addition, an effective policy coordination,
monitoring and evaluation framework shall be put in place to track
implementation and facilitate review of the policy.
It is expected that the implementation of this policy will unlock the potential of
the subsector and lead to a highly competitive and thriving agriculture subsector
able to enhance uptake of agriculture as one of the options to mitigate on
agricultural shocks and thus build resilience amongst the farmers, livestock
keepers and fisher folks.
vii
GLOSSARY OF TERMS
Aquaculture
Artisanal fisherfolk
Livestock- to include bees
Distribution
NDVI- is a measure of the state of plant health based on how the plant reflects light
at certain frequencies.
CHAPTER ONE: INTRODUCTION
1.1 Background
Kenya’s economy is predominantly dependent on the agriculture sector which
contributes about 34.1 per cent directly to the Gross Domestic Product (GDP)
and additionally 27 per cent through manufacturing, distribution and service-
related sectors. The sector contributes 65 per cent of the Country’s total exports
and employs 60 per cent of the population (KNBS, 2020). Despite experiencing
mixed performance over the last decade, the sector remains the mainstay of
Kenya’s economy. According to the 2015/16 Kenya Integrated Household
Baseline Survey (KHIBS), 76 per cent of Kenyans live in rural areas and derive
their livelihoods directly or indirectly from agriculture.
The Agriculture Sector has recorded impressive growth since independence
though many challenges persist in achieving food and nutrition security;
transforming agriculture from subsistence to commercial production; improving
access to markets; efficient use of inputs and accessing agricultural credit and
insurance among others. Risks and uncertainties are inherent in agricultural
production systems as producers are exposed to various disasters owing to
vagaries of weather, biological perils that include pests and disease outbreaks,
idiosyncratic risk such as hail and fire and systemic risks covering large areas.
These disasters severely disrupt agricultural production resulting in vulnerability
of producers and other value chain actors.
Estimates available indicate that 45 per cent of the rural population has
insufficient food to meet their daily energy requirements. The food insecure
population lacks access to adequate food and even a higher number consume
food of poor nutritional value and quality. The incidence and prevalence of food
insecurity is more severe in Arid and Semi-Arid areas due to inadequate
resource endowment and agricultural risks such as pests, diseases, market price
and weather-related risks. For their survival, the food-poor depend on relief
food provided by the government and Non- Governmental Organizations. It is
estimated that the government spends around 40-65 million US Dollars annually
on famine relief; and the figure is even much higher when famine relief support
by Non-Governmental Organizations is taken into account. This food insecurity
scenario calls for appropriate intervention measures including increased
investment in agriculture risks management.
The Medium-Term Plan III (2018-2022) outlines the programmes that the
Government is implementing to achieve Kenya Vision 2030. Under the “Big
Four Agenda” agriculture insurance is prioritized as an intervention
measure for contributing towards the 100 per cent food security and nutrition
pillar.
1.2 History of Agricultural Insurance
Agricultural insurance started in Europe over two centuries ago and was offered
to private owners to protect against livestock mortality and named peril events
such as crop hail. In Kenya, agriculture insurance dates back to 1942 when the
colonial government created the Guaranteed Minimum Return (GMR) scheme
covering select crops. The GMR program was discontinued in 1978 following
years of poor performance and unsustainable financial losses. Between the late
1970s and mid-2000, there was very little interest by private commercial
insurers in Kenya in the provision of crop and livestock insurance. Traditional
indemnity-based covers for the large-scale commercial farmers and dairy
farming sector were offered by insurers on a limited scale.
From mid-2000 there was considerable re-emergence of interest in agriculture
insurance targeting farmers largely stimulated by;
1)
An international re-insurer that actively worked with the local insurance
industry to develop traditional and index crop and livestock insurance
products and programs
2)
International development agencies that provided technical and financial
assistance to the interested Kenyan Insurers to develop new index-based
crop and livestock insurance programs.
The Insurance Act Cap 487 of the Laws of Kenya was enacted in 1984 and
operationalized in 1987. The Act provides a framework for regulation,
supervision and development of the Insurance industry in Kenya. The Crops Act
2013 provides for establishment of Crop insurance programs but the
administration of agricultural insurance remains under Cap 487.
1.3 Justification
The Kenya agriculture sector is increasingly becoming vulnerable to vagaries of
weather-related risks impacting negatively on the sector and general economy.
Climate change has exacerbated the weather vagaries resulting in extreme
events such as droughts, floods, increased incidences of pests and diseases.
Droughts are by far the leading cause of agricultural losses in Kenya. The
frequencies of severe droughts have increased from a 5-7-year cycle to 2-3-year
cycle. Droughts have a direct impact on the economy and affect the linkages
between different sub-economies, ecologies and communities. For instance,
during the drought of 2008 to 2011, the Kenyan economy lost an estimated
KSh. 968.6 billion. The livestock sector incurred 72 percent of that loss, or KSh.
699.3 billion, with 9 percent of all livestock lost. The Government of Kenya
spent KSh. 4.2 Billion on post disaster interventions.
Since 1970, Kenya has experienced a total of 41 major floods affecting 6.9
million people. In the same period 1970, 12 major drought events have also
occurred. Between 2008 and 2017: estimated KShs 699 billion in livestock
losses and KShs 121 billion in crop losses. Over the past 12 years, the
Government of Kenya has spent on average KShs 4.2 billion per year on
disaster relief funding. In 2017: Ksh 16 Billion used; Maize floor subsidy: 9
Billion
In the Fisheries sub-sector, the risks experienced mainly take the form of
damage to production units (Ponds and Cages), drying up of water sources for
aquaculture, loss of fish stocks, fishing craft/gears, fishing grounds and fish
landing and handling facilities, high post-harvest losses and loss of market
access threatening the livelihoods of artisanal fisherfolks. Between 1997 and
2000, Kenyan fish and fish products were denied market access to the European
Union due to loss of fish handling facilities occasioning the closure of 13 local
fish processing factories and the associated business in the lake Basin towns and
its environs. In addition, long rains season of the year 2020 caused flooding in
various parts of the country resulting in the destruction of 149,600 ponds
countrywide. Consequently, seven (7) Million pieces of fish valued at KSh. 777
Million were lost. For the farmers involved in cage culture in Lake Victoria, the
entire loss was estimated to be KSh. 500 Million.
These risks continue to impact the society and therefore all possible measures
should be taken to prepare actors along the agriculture value chain and improve
readiness for effective and fast response, and plan for rapid recovery. Plans and
institutional arrangements, human and financial resources need to be developed
to ensure preservation of maximum flexibility, adaptability and scalability to
increase capacity to address these challenges. Integrated agricultural risk
management approaches can build long term resilience of vulnerable and food
insecure communities in the face of increasing climate variability and shocks.
Agriculture insurance has been identified as one of the ways to de-risk the
agriculture sector and reduce vulnerability of farmers and other value chain actors.
However, the private sector undertaking agricultural insurance has been reluctant
to fully embrace the sector due to attendant risks. The uptake of insurance by
farmers is also low. Further, the agricultural insurance sector in Kenya has
operated with no specific policy to guide.
This policy aims at addressing the challenges facing the sector and exploiting
opportunities with a view to de-risk the sector and increase uptake of agriculture
insurance.
1.4 (a)Vision
Innovative and sustainable agricultural insurance
1.4 (b)Mission
To integrate insurance in all agricultural production systems
1.5 Policy Objectives
Overall objective
To foster development and growth of agriculture insurance for sustainable food
and nutritional security through enhanced agricultural productivity and
profitability
Specific Objectives
The specific objectives of this Policy are:
1.5.1 To provide an enabling environment for the development and growth
of agriculture insurance.
1.5.2 To facilitate development of affordable, innovative and accessible
agriculture insurance
1.5.3 Capacity building and awareness creation of agricultural value chain
actors in agricultural insurance
1.5.4 To facilitate generation and use of data to support agriculture
insurance.
1.5.5 To promote research and development, technology, innovation and
knowledge management in agriculture insurance.
1.5.6 To promote participation and collaboration among stakeholders in
agriculture insurance
7
CHAPTER TWO: SITUATIONAL ANALYSIS
2.1
The Insurance Industry
The insurance market in Kenya is predominantly private sector-based. In 2018,
there were 56 insurance companies, 215 insurance brokers and over 10,457
licensed insurance agents dealing with both life and nonlife insurance
businesses (Insurance Industry Report, 2018). The interests of the private
insurance sector are represented through the Association of Kenya Insurers
(AKI) which was established in 1987 as a consultative and advisory body for
the private insurance industry. Insurance business is governed by the Insurance
Act Chapter 487 of the laws of Kenya. This Act was amended in 2007 to create
the industry regulator, the Insurance Regulatory Authority.
Kenyan insurance industry remains concentrated in the urban areas with
Nairobi dominating with 65.1% and 77% of life and non-life insurance
premiums respectively as at the end of 2018. The overall insurance penetration
stands at 2.43% of the GDP (IRA, annual report 2018). The level of Agricultural
insurance contribution stands at less than 1% of total insurance premiums.
2.2
Agricultural Insurance Market
Agricultural insurance in Kenya is an emerging line of insurance business. Over
the past few years there has been growing interest in agricultural insurance with
a number of insurance providers offering various products for both crop and
livestock subsectors. In 2014 the Government of Kenya increased interest in the
agricultural insurance and has from then partnered with private sector actors
with an aim of making insurance available and affordable to farmers. A few
companies in Kenya undertake agricultural insurance. The agricultural
insurance covers less than one percent of the total insurance premium.
Agricultural insurance is classified as miscellaneous by the Insurance Act. Some
of the agricultural insurance products available in the Kenyan market include
Crop and Livestock Insurance. Crop Insurance covers crops against physical
loss or damage and include covers against fire, windstorm, excessive rainfall,
drought and uncontrollable pests and diseases. Livestock Insurance provides
cover against vagaries of weather, biological perils (pests and diseases)
idiosyncratic/individual peculiar risks (fire, hails, theft) and systemic risks
covering large areas e.g. Tsetse, armyworm and fall-worm.
2.3
Status of Agricultural Insurance
There are two broad categories of agricultural insurance in Kenya. These
8
include the indemnity-based insurance and index-based insurance. Kenya has a
relatively long history of indemnity-based agricultural insurance. Up to 2013,
there was a small but innovative private sector agricultural insurance market in
Kenya. Currently all general insurers are licensed to underwrite agricultural
insurance, however by 2020 there were only eight companies underwriting
agricultural insurance. The level of Agricultural insurance uptake and
penetration is still very low in Kenya with less than 1% of farmers and
pastoralist purchasing insurance.
In Livestock Insurance, the animals insured include dairy and beef cattle, small
stock, poultry and horses. Dairy cattle form the main insured class under
livestock. Under conventional insurance, various perils are bundled together
under one cover and losses are assessed individually to determine the
compensation under the cover.
Since 2000, there have been major innovations by agricultural insurance
practitioners to use parametric or index-based solutions to insure against
production losses in pasture, all of which use satellite imagery to measure the
Normalized Difference Vegetative Index (NDVI) in pasture. The Index
insurance is a single peril policy against adversities of drought/forage scarcity.
In 2010 ILRI piloted the Index-based Livestock Insurance (IBLI) contract in
Marsabit County. In 2014 the Government of Kenya partnered with ILRI and
the private sector actors to extend Kenya Livestock Insurance Programme
(KLIP) in the Counties of Wajir and Turkana, then later to six other ASAL
counties. Under KLIP programme, the government provides 100 percent
premium support for up to five Tropical Livestock Units (TLUs) for each
selected pastoralist beneficiary.
In the crop subsector conventional insurance products are mainly marketed to
the commercial farmers, while weather index insurance (WII) products,
developed in collaboration with development partners, target subsistence and
semi-commercial crop producers. Through support of the World Bank, Kenya
has also developed Area Yield Index Insurance Programme (AYII) that targets
subsistence and semi-commercial farmers. The AYII is being implemented
under a Public Private collaboration model that was initially piloted on maize
production in three counties in 2015 and by 2020 had expanded to 37 counties.
Under this product, the government provides 50 percent premium support
targeting n farmers with farm size ranging from 0.5 to 20 acres. In addition, the
government supports data collection, farmers’ mobilization, awareness creation,
9
capacity building and coordination of stakeholders.
In the fisheries sub-sector, insurance packages exist for the large commercial
production entities. For instance, in industrial fishing, Flag States are
encouraged to promote access to insurance coverage by owners/charterers of
fishing vessels to protect the crew and their interests. For the artisanal fisheries
and aquaculture, a suitable insurance package is yet to be developed.
Large scale commercial fish farm owners are also encouraged to insure their
enterprises against the inherent risks, albeit expensive non-specific insurance
packages. However, there is low interest in provision of insurance services to
artisanal fishing communities/farmers due to as they are considered as high risk
enterprises due to:
1)
High costs of serving often remote fishing villages and fish farms
2)
Difficulty of dealing with a fishing population which more often has no
access to other financial services (credit/banks)
3)
Relatively small premiums collected from individual fisherfolks
4)
Related high administrative and monitoring costs
5)
Low levels of education of artisanal fisherfolks
The National Oceans and Fisheries Policy 2008 is has been revised with the
objective of encouraging more private sector investment in the Fisheries and
Blue Economy. The revision has amongst other proposals put forward, the
adoption of risk management measures in the sub-sector that call for promoting
the development of appropriate Fisheries, Aquaculture and Blue Economy
insurance packages as one of the safety nets available for the players in the
industry.
2.3 Analysis of Key Issues in Agricultural Insurance
2.3.1 Agricultural Risk Exposure
The Kenya Agriculture sector is increasingly vulnerable to risks especially
extreme and increasing weather variability. Erratic rainfall punctuated by severe
droughts is the biggest risk facing the Kenya agricultural sector. Intermittent
seasons of high rainfall resulting to floods followed by seasons of drought
continue to characterize Kenya’s agriculture environment.
The frequency of severe droughts has increased from a 5-7-year cycle to a 2- 3-
10
year cycle. Droughts have a direct impact on the economy and affect the
linkages between different sub-economies, ecologies and communities. Severe
drought occurring with increasing frequency over the past decade has caused
profound effects on crop, livestock and fisheries production in the country. For
instance, during the drought of 2008 to 2011, the Kenyan economy lost an
estimated KSh. 968.6 billion. The livestock sector incurred 72 percent of that
loss, or KSh. 699.3 billion, with 9 percent of all livestock having been lost.
Estimated crop losses amounted to more than KSh. 121.1 billion. The
Government of Kenya spent KSh. 4.2 Billion on post disaster interventions. Key
crops experienced significant losses in one out of three years as a result of
adverse risk events between 1980 and 2012. Combined, these crop-loss events
resulted in drops in Agricultural GDP of 2-4.2 percent.
Besides weather related risks, pest and diseases pose a significant threat to
Kenyan farmers. Animal diseases particularly East Coast Fever, Foot and Mouth
Disease, CBPP and CCPP have direct effect on livestock productivity and trade.
Pest incidences including ticks, tsetse, locusts and armyworms affect livestock
output and feed availability. The losses associated with diseases outbreaks,
predation and rustling, drought effects and milk yield lose, have received little
attention from insurers with less than one percent annual gross written
premiums reported in agriculture sector (IRA Annual Report, 2019).
With the increase in changes in climate, there’s a noted increase in notifiable
crop diseases and pests. For example, MNLD in 2010-2013, fall armyworms,
Tuta absoluta in tomato production and the locusts attack in 2019. Localized
perils like frosts, hailstorms and fires and systemic risks covering large areas
sometimes affect the farmers exposing them to more danger.
The Fisheries sub-sector contributes provides 500,000 direct jobs and supports
about 2 Million people indirectly in Kenya. By 1998 for instance, Lake Victoria
fisheries accounted for 90% of all the fish landed in Kenya valued at USD 80
Million, and with an export value of USD 35 Million. This was mainly
attributed to the Nile Perch fishery that resulted in the setting up of 35 fish
processing plants. With the closure of the European market to Kenyan fish and
fisheries products that lasted between 1997 and 2000, 13 fish processing plants
folded up occasioning the loss of 1000 jobs and a collapse of fisheries related
11
businesses in Kisumu and the surrounding areas that had a daily turnover of
KSh 25 million. In addition, the heavy rains that were experienced in early 2020
caused flooding in various parts of the country that resulted in the destruction of
149,600 ponds countrywide. A total number of fish lost due to the floods was 7
Million valued at KSh 777 Million, amount that would otherwise would have
been earnings for the fisherfolk.
Agricultural disasters push better-off farmers into poverty, and the already poor
into destitution, and can take years to recover from. The disasters can also make
it more costly or simply impossible for the farmers to access credit facilities,
limiting opportunities for agricultural producers to invest in better tools and
technologies to increase productivity. These farmers are therefore unable to
transit from subsistence to commercial farming hence curtailing overall
Agricultural development and contribution to GDP.
2.3.2 Data for Agricultural Insurance
Agricultural data is one of the key inputs required for successful agriculture
insurance programmes. Data is required in sufficient, reliable and verifiable
form to support various stages of risk assessment, product design, costing, loss
assessment, and payout determination. In addition, data is critical for enhancing
transparency and dispute resolution that may arise from either basis risk or
moral hazards. Sustainability of agricultural insurance programmes therefore
depends on ability of the involved agencies to generate and utilize reliable data.
Kenya has several pieces of legislations that address data collection, storage,
confidentiality, and data utilization. These include the Statistics Act 2006
(Revised 2019), The Access to Information Act 2016, the Data Protection Act
2019, the Computer Misuse and Cybercrime Act 2018, among others.
Stakeholders’ are expected to observe the existing laws and regulations while
collecting and using agricultural insurance data. The government is responsible
for preparation and enforcement of relevant regulations and guidelines to ensure
12
stakeholders’ conformity with the laws.
The government is responsible for collection and provision of most of the
agricultural insurance data as a public good. The bulk of such data is collected
by agricultural departments, agricultural state corporations, local and
international research organizations, universities, development partners, farmer
organizations and others by private sector agencies. However, capacity of data
management is inadequate in terms of funding, staffing and training. Data
collection and dissemination is mostly analog and disintegrated. The
government has the mandate to oversee the quality of agricultural data,
including provision of guidelines and standards for data collection and
dissemination as well as enforcement of laws and data regulations on data
management.
Besides the primary yields data, ancillary data related to production such as
agro-meteorological data and early warning data are required for monitoring the
situation to enable trigger the desired action. Where production and yields data
are not reliable, the ancillary data such as rainfall or normalized difference
vegetation index (NDVI) have also been used as proxy commodity yields
indicators to deliver various types of weather index-based insurance products. In
Kenya, management of such ancillary data is undertaken by several agencies
responsible for weather, geospatial and remote sensing.
The main data required for agricultural insurance include;
1)
Long term historical yield and production data for insurance product
development;
2)
Yield and production data for loss assessment and improvement of the
quality of historical data for subsequent years;
3)
Data for development of homogenous production and aquaculture zones;
4)
Agro-meteorological data to support weather-based index insurance;
13
5)
Georeferenced data to support sampling of farmer, pastoralists and fisher-
folk along various agricultural value chains;
6)
Data to support seasonal enterprise condition monitoring, including early
warning data, farmers and pastoralist scale of operations and vulnerability
status and market prices.
7)
Data on Livestock Identification and Traceability System (LITS), rustling
and predation
2.3.3 Agricultural Insurance Product Development, Distribution and
Uptake
Development of agricultural insurance products is nascent and therefore remains
limited. This is because the development of agricultural insurance products that
meet various client needs in a predominantly smallholder/pastoral based
agricultural system is challenging. Insurers continue to face a number of
challenges and therefore shy away from venturing into agricultural insurance. In
spite of the several years of investment in product design and development, very
few of these programs have achieved widespread acceptance and uptake. The
start-up costs associated with development of products eventually translate into
expensive premiums thus making smallholder farmers unable and to pay for
these commercially priced agricultural insurance products. In addition, farmers
have poor understanding of agriculture insurance and this reduces demand and
at times may result in purchase of inappropriate products.
By 2020, the following insurance products were being implemented in Kenya;
(1)
Multi-peril crop insurance (MPCI); a traditional indemnity insurance
product against all perils at farm level in which the pay-outs are
determined through a farm-level loss assessment process. MPCI
transaction cost and moral hazard level are high but basis risk is low and
claim settlement time is medium;
(2)
Area Yield Index Insurance (AYII); a crop insurance product based on
average losses at the regional level, rather than farm level. The pay- outs
are based on crop cutting experiments. Its transaction cost, basis risk and
claim settlement time are medium. However, the moral hazard level is
low; and
14
(3)
Weather Index Insurance (WII); a crop insurance based on weather
parameters such as rainfall, temperature, or soil moisture correlated with
farm-level yields or revenue outcomes. Its transaction cost, moral hazard
level and claim settlement time are low with high basis risk.
(4)
Index based Livestock insurance; which uses NDVI values to asses
seasonal availability of forage that can sustain livestock.
(5)
Individual animals’ insurance; where an animal keeper insures
specified risks for a particular animal.
Conventional insurance primarily relies on the traditional agency-based
distribution model(s) which is a one on one interaction between the insurance
companies and consumers. Smallholder farms tend to be spread over wide
areas and this makes agricultural insurance distribution incur high costs. The
distribution challenge is worsened by lack of established insurance agent
networks in rural areas.
2.3.4
Agricultural Risk Financing
Agricultural insurance risk financing aims at achieving the least-cost coverage
for an insurer’s losses while ensuring post loss financial resource availability.
As the market for agriculture insurance is fairly small and not profitably
sustainable, it requires a well-structured risk financing model.
By 2020 agricultural insurance was being carried out on a limited scale. This is
attributed to various reasons including; lack of capacity to carry the risk,
especially for catastrophic risks; Reinsurance is available, although it is
expensive;
Low incomes inhibit the development of insurance markets. Incomes for the
majority of the population are absorbed by basic necessities, such as food and
housing. Where insurance is available, health insurance and life insurance are
usually given higher priority over agricultural insurance. In many cases, rural
households involved in agricultural activities do not generate enough profits to
cover the costs of agricultural insurance
In relation to traditional crop indemnity insurance, the costs of assessing losses
are usually high. Small insured farm units characterized by premium volumes
15
that are very low and insufficient to cover for costs of loss assessment. Lastly,
though index insurance lowers the transaction cost, it carries extremely high
development and other start-up costs. These start-up costs eventually translate
into high premiums.
To achieve accelerated agricultural development and self-sufficiency in food
production and general economic growth, the government has implemented a
number of programs aimed at enabling farmers access to finance. Some of these
programs includes; guaranteed minimum returns for farmers; Agriculture
Finance Corporation offering farmers loans. These programs were aimed at
increasing food production and food security through;
(1) seasonal credit provision,
(2) Agricultural credit-insurance component to protect farmers against
production and yield loss and
(3) a system of guaranteed minimum prices for crop and livestock output.
Livestock insurance services in Kenya are underdeveloped despite the fact that
the livestock industry contributes significantly to the GDP. Currently only a few
firms offer livestock insurance which covers high value animals such as dairy
cattle, horses and companion animals. Some of the instruments in use within the
country include:
(1)
Sovereign Disaster Risk Financing
Market-based risk transfer mechanisms at the sovereign and macro level
are part of Kenya’s portfolio of risk financing instruments. The sovereign
instruments are appropriate in cases where the micro level interventions,
including livestock insurance, are overwhelmed. Improving sovereign
financing capacity through strengthening and expanding the National and
County Government’s portfolio of disaster risk financing (DRF)
instruments is one of the strategies in entrenching, sustaining and
complimenting the livestock insurance.
(2)
Government support to agricultural risk financing
The government through the Ministry of Agriculture, Livestock, Fisheries
and Cooperatives is financing the Kenya Livestock Insurance Program
(KLIP) in eight ASAL Counties. The livestock covered are camels, cattle,
sheep and goats. The government pays the full premium for households
16
covered by the program. The Government intends to progress into a partial
risk coverage arrangement in the short to medium term.
(3)
Premium financing
This refers to the lending of funds to a person or entity to cover the cost of
an insurance premium. The premium finance company then pays the
insurance premium and bills the individual or entity usually in monthly
instalments for the cost of the premium. This instrument is currently
working in some crop insurance schemes and high value livestock
enterprises.
(4)
Other financing modalities that have worked include;
a) Asset Backed Insurance instruments; this is used in asset rich but cash
poor communities where portions of their livestock usually 10% is
converted into premiums to cover entire herds.
b) Cost Sharing Schemes; A portion of the cost of premiums is met by
policy-holders while the balance is catered for under existing subsidy
programs. The best practice is where the local communities carry a
bigger proportion of the cost. This increases impact and creates
ownership of the programs.
c) Donor Funded & Technical Assistance Programs; through this
framework, partners offer both financial and technical resources to
support social impact initiatives. A typical example is the resource
dedications by ILRI and WB on the Livestock Index Insurance Scheme
implemented by KLIP
With an appropriate financing model or mechanism, agricultural insurance,
combined with other measures of risk reduction, can greatly contribute to short
and long-term development of self-sufficiency in food production.
2.3.5 Policy and Legal Framework for agricultural insurance
Kenya is a signatory to global and regional conventions and instruments on
disaster risk reduction including the Sendai Framework for Disaster Risk
Reduction, 2015 - 2030; and the Africa Regional Strategy for Disaster Risk
Reduction (AfRSDRR) as part of Africa Union Agenda, 2063. The foregoing is
aimed at reducing the vulnerability of populations and strengthening resilience.
17
The Constitution of Kenya 2010 Article 43, guarantees every person the right to
be free from hunger and to have adequate food of acceptable quality.
Agriculture related risks exposes producers to losses due to limited risk
mitigation measures hence threatening the above stated right.
One of the priorities of the Government in the Vision 2030 is to ensure access,
efficiency and stability of insurance as fundamental to economic transformation
of the country. This has been identified in the Agriculture Policy and the
Agricultural Sector Transformation and Growth Strategy as core in the
development and implementation of agriculture insurance. The Crops Act 2013
provides for crop development, pest and disease control, climate change
resilience and establishment of crop insurance. The Livestock policy, 2020
advocates for increased access to insurance by value chain players to mitigate
against inherent risks in livestock production systems.
The National Oceans and Fisheries Policy 2008, proposes the adoption of risk
management measures in the sub-sector that will promote the development of
appropriate Fisheries, Aquaculture and Blue Economy insurance packages as
one of the safety nets available for the players in the industry.
The Insurance Act Cap 487 of the Laws of Kenya provides for agricultural
insurance as a subclass of insurance under the miscellaneous class. Other
legislation that support agricultural insurance include the Kenya Deposits
Insurance Act (No.10 of 2012) and the Kenya Re-insurance Corporation Act
(No.9 of 1997).
The legal and regulatory framework above, is not expressly supportive of the
growth and development of the agriculture insurance. In this regard, therefore,
there is need to develop an appropriate legal and regulatory framework to
provide an enabling environment for expanding agriculture risk management
options, enhance capacity to increase productivity, stabilize agricultural income
and reduce food insecurity. This will encourage more players to enter the
agriculture insurance market hence offer more options to the consumers.
2.3.6 Institutions in Agricultural Insurance
The key actors in the industry include; the Ministry and departments responsible
for Agriculture at national and county level; the Kenya National Bureau of
Statistics (KNBS); Insurance Regulatory Authority (IRA); Insurance
Companies, Re-insurers, Insurance Intermediaries, Association of Kenya
Insurers (AKI); Insurance Service Providers, Banks/Financial Institutions;
Agro-dealers; farmers associations; farmers; and, training and research
18
institutions.
2.4 Challenges in Agricultural Insurance.
2.4.1 Agricultural Risk Exposure
Agricultural risk exposure to farmers is caused by extreme weather events
(floods, droughts, frost), climate change, predation, cattle rustling and high pests
and diseases incidences, idiosyncratic risks (Fires, hailstones, landslides and
earthquakes) and crop damage by wildlife among others. The reduction of the
farmers’ exposure to agricultural risk is limited by the following challenges:
(i) Limited access to information on/ inadequate risk assessment and
profiling
Risk assessment is generally quite expensive, requiring heavy investment. In
most cases the government and private sector organizations carry out risk
assessment on a minimal scale. This information is not easily accessible
since the private sector does it for their own consumption. This means
farmers, pastoralist and fisherfolk remain unaware of intensity of the risks
and are unable to transfer the risks or mitigate against their effect on their
agricultural activities.
Further, there has been poor collaboration among partners involved in risk
assessment and profiling which leaves gaps while some actors duplicate
roles.
(ii) Inadequate capacity for risk assessment and profiling
There is inadequate capacity among government, insurers and other
stakeholder to undertake risk assessment and profiling. This makes the
farmers, pastoralist and fisher folk unable to make informed decisions on the
choice and uptake of insurance products.
(iii) Weak early warning system
Approaches to risk assessment and profiling tend to focus on post- disaster
interventions. This results in lengthy risk analysis and non- transference of
risks. In addition, there is inadequate early warning system that can provide
reliable information for decision making by stakeholders.
(iv) Multiple risks ( shift to product development)
19
Crop, livestock and fish production is faced with a myriad of risks which
make insurance companies apprehensive of underwriting the risk. This
means the premium cost to the farmers will be expensive and accessibility to
insurance products a challenge. Further the heterogeneity in the agriculture
management plans make underwriting complex.
2.4.2 Agricultural insurance data
Data is required for product design and development, loss assessment,
homogenous production zone and premium support targeting.
(i)
Inadequate and unreliable data for agricultural insurance
The agricultural insurance programmes require reliable historical data at the
lowest administrative levels.
Availability and accessibility to this data in usable digital formats is affected
by inadequate data collection, processing, storage and dissemination. In
addition, the national and county governments have inadequate technical
capacity, validation, comprehensive farmer database, and limited spatial data
infrastructure.
(ii)
Weak coordination
There is weak coordination in data collection and dissemination leading to
redundancy, duplication and unreliability.
(iii)
Low application of ICT
Kenya’s agricultural data management is mostly paper based (analog) in most
aspects. Emerging technologies and innovations such as smart/mobile phone
and GIS are yet to be adopted for use by government and private agencies.
2.4.3 Agricultural insurance products development, distribution and
uptake:
The main issues affecting the implementation of effective agricultural Insurance
in the country include;
1)
Inadequate capacity to develop appropriate agricultural insurance
products.
- There are very few skilled agriculture underwriters with the insurance
sector being heavily dependent on international consultants and reinsurers
for product design, actuarial and rating guidance.
2)
Inappropriate distribution channels – Insurers use the traditional
20
insurance channels of professional insurance intermediaries. Insurance
requires a lot of trust in the channel of distribution being used. The
potential policyholders, key among them the farmers have better trusted
partners like their local chiefs, agro-dealers, shopkeepers, cooperatives,
lending institutions among others. There is limited adoption of
technology in distribution of agriculture insurance products. In addition,
the scope of the distributors is narrow.
3)
Poor understanding of insurance- There is general lack of awareness
and understanding of the role and limitations of agricultural insurance
products among the various players in the agricultural value chain
including policy makers, farmers, agro-dealers, financial institutions, and
insurers. This may lead to unmet expectations resulting to mistrust and
limited supply, demand and uptake of insurance
4. Low income and conflicting religious and cultural beliefs .
Farmers’ incomes are low hence insurance not easily affordable given
their hierarchy of needs. In addition, some insurance products do not meet
cultural and religious acceptance beliefs
2.4.4 Agricultural Risk Financing.
Sustainable agricultural insurance requires adequate risk financing. The main
challenges contributing to inadequate agricultural risk financing in Kenya
include:
i) Inadequate capacity by underwriters to cover risks. This has been
occasioned by lack of financial capacity by insurers to underwrite agricultural
insurance and the slow pace of investment by the government in the insurance
subsector. Whereas there exist reinsurance markets with adequate capacities,
challenges remain in terms of skills transfer hence the market remains
underdeveloped
ii) High cost of agriculture insurance premiums. Agricultural insurance face
challenges such as multiple perils, high cost of collecting data, risk assessment
and distribution among others. These challenges make agricultural insurance
premium to be costly hence discouraging investments.
In addition, the high costs of development especially for index insurance,
21
where high claims assessment costs render agricultural risk financing an
expensive venture for insurers.
iii) Inadequate risk financing infrastructure. The Market based risk financing
infrastructure is not adequately developed in some areas of agricultural
production hence hindering access to risk financing.
iv) High frequency of catastrophic risk. Agricultural sector faces huge losses
that are straining the capacities of local insurance companies. Risks are high
and more frequent (leading to high loss ratios) hence expensive to insure
v) Inadequate incentive measures
The majority of Kenyan farmers are smallholders and their uptake of agriculture
insurance is largely dependent on a range of interventions and incentive
structures. The situation is more pronounced in high-risk areas. In situations
where there is no premium support to adequately stimulate uptake of
agricultural insurance, farmers tend to remain generally excluded from
benefiting from agricultural insurance programs.
Further, insurers and other providers along the value chain tend to shy away
from venturing into agricultural insurance due to its high-risk nature.
Promoting agriculture insurance is therefore dependent on deployment of a
range of incentive structures to make agricultural insurance attractive to farmers
and insurance companies
Legal and Regulatory Framework
The Insurance Act Cap 487 of the Laws of Kenya provides for Agriculture
insurance as a subclass of miscellaneous insurance class under general insurance
business. The classification makes it difficult to specifically target interventions
in agriculture insurance. This legal and regulatory framework is therefore not
adequate to foster growth and development of Agriculture insurance.
There is no legislation to specifically support development of agricultural
insurance despite its unique nature from product development, distribution and
claims management. This is a major disincentive for private insurers to venture
into agricultural insurance given its risky nature.
For any risk to be placed out of Kenya, authorization must be obtained from
IRA. This requires demonstrations for inability for local insurance to absorb the
risk, which may not be easy in Agriculture Insurance.
Despite existence of various legislations, the operating environment has not
22
been sufficiently enabling for development of agriculture insurance. For this
reason, agricultural insurance remains underdeveloped with limited participation
of private insurers as farmers continue to be exposed to agricultural risks
23
CHAPTER THREE: POLICY INTERVENTIONS
3.1
Agricultural Risk Exposure
The policy focus will be on reduction of agricultural risk exposure through
addressing inadequacies in risk assessment and profiling, strengthening early
warning systems, coupled with enhancing technical and financial capacities in
the insurance industry.
Policy Statements;
The national Government will;
I. Build Capacity for risk awareness, assessment and profiling
The County Governments will;
I. Develop Capacity for risk awareness, assessment and profiling
The National and County governments in collaboration; with private sector
and other stakeholders will;
(i) Support and Undertake risk assessment and profiling;
(ii) Develop systems for risk assessment and profiling;
(iii) Develop and implement Early Warning System Support Early Warning
System; and,
(iv) Promote innovative insurance products for risk transfer
3.2
Agricultural Data Management
Data is required for planning and efficient management of agricultural insurance
programmes. Consequently, policy will focus on the following;
Policy Statements;
The national government will;
(i)
Develop standards and guidelines required for agricultural insurance data.
(ii)
Enforce compliance to standards and guidelines for agricultural insurance
data.
The county governments will;
a)
Enforce compliance to standards for agricultural insurance data;
24
b)
Implement guidelines for agricultural insurance data
The national and County Governments in collaboration with stakeholders
will;
a) Facilitate access to reliable agricultural insurance data in usable
formats while adhering to data confidentiality and security
legislations;
c)
Promote adoption of application of Geo-Information based
technology in agricultural insurance;
d)
Strengthen investment in technical capacity and infrastructure;
e)
Establish and strengthen agricultural insurance digital data repository
system.
f)
Enhance coordination and management mechanism of agricultural
insurance data for reliability and access.
3.3
Agricultural Insurance Product Development, Distribution and
Uptake
Agricultural insurance product development, distribution and uptake is central
to increasing agricultural insurance penetration in the target beneficiaries. Policy
will focus on the following areas;
Policy Statements;
National Government will;
(i)
Enhance support to research on agricultural insurance products
development and distribution channels.
The County Government will;
(i)
Promote public awareness on agricultural insurance products;
National and County Governments will;
i. Facilitate capacity building in agricultural insurance products
ii. Support development of innovative, cost
effective and appropriate agricultural insurance
products;
25
iii. Promote access, distribution and uptake of agricultural
insurance products;
iv. Develop mechanism to monitor and review agricultural
insurance uptake;
v. Promote authorization of members of professional bodies to
support agriculture insurance
3.4 Agricultural Risk Financing
Innovative measures are required to broaden and deepen agricultural risk
financing options for various actors in the sector to improve the sustainable
supply and uptake of agricultural insurance products.
Policy Statements;
The National Government will;
i. Facilitate development of innovative agricultural insurance financing
instruments
County Government will
(i) Develop farmers’ support mechanisms for uptake of agricultural
insurance.
The National and County Government will;
(ii) Encourage the use of agricultural insurance pools
(iii) Offer incentives to stakeholders who provide agricultural insurance
(iv) Support the public private partnership in agricultural insurance
(v) Establish mechanism for sustainable agriculture insurance funding
including establishment of agricultural insurance fund
3.5 Legal and Regulatory Framework for agricultural insurance
There is need for legal and regulatory reforms in order to create an enabling
26
environment for the development of agriculture insurance.
Policy Statements:
National Government will
(i)
Review and strengthen the legal and regulatory framework to support
agriculture insurance including affirmative action
(ii)
Develop standards and guidelines for implementation of agriculture
insurance programmes
(iii)
Promote collaboration with international bodies involved in insurance for
technical support and skills transfer;
County Governments will;
(i)
Develop county-specific enabling legislation to promote agriculture
insurance and related services;
(ii)
Create awareness on the legal provisions to enhance insurance uptake
(iii)
Implement relevant provisions of the laws and regulations for
agriculture insurance;
The National and County governments will
(i)
Strengthen technical and institutional capacity for development
of agriculture insurance;
(ii)
Mainstream agriculture insurance in annual work-planning and
budgeting cycles; and,
(iii)
Facilitate the coordination, cooperation and collaboration among
agriculture insurance stakeholders;
27
CHAPTER FOUR: POLICY IMPLEMENTATION
4.1 Institutional Structures for Policy Implementation
The 4th Schedule part 1 and 2 of the Constitution of Kenya 2010 on the
distribution of functions between the National Government and the County
Governments whereas agricultural policy is the function of the National
Government, crop and animal husbandry is the function of County
Governments. Further, the legal notice No.137 of 2013, in compliance with the
Transition to Devolved Governments Act, 2012; enhancing accessibility to
affordable insurance packages and credit is the mandate of the County
Governments.
The implementation of this policy will be undertaken by various government
agencies at the national and county level. These include the ministries
responsible for agriculture; disaster management and relief services; national
statistics; finance; interior and coordination of national government and the
County Governments. Other players include insurance and re- insurance
companies, insurance industry associations, financial institutions, cooperative
societies, agro-dealers, farmers’ associations, and other non-state actors.
i)
The National Government
The Ministry responsible for agriculture will take lead in the overall
coordination of implementation, monitoring and review of the policy. In
addition, the Ministry will be responsible for data management, capacity
building, programme formulation and implementation.
ii)
The County Governments
County Governments will be responsible for implementation and monitoring
agriculture insurance policy at county level. In addition, the counties will carry
out capacity building and data management; develop and implement County-
specific agriculture insurance programmes.
iii)
Kenya National Bureau of Statistics
Kenya National Bureau of Statistics (KNBS) is mandated by law to be the
repository of and management of official statistics; the institution will be
responsible for provision of statistics necessarily for the implementation of the
agriculture insurance.
28
iv)
Insurance Regulatory Authority
The Insurance Regulatory Authority (IRA) is responsible for regulation,
supervision promotion of the development of the insurance industry. The
Authority will be responsible for administering the insurance law and protection
of the interests of insurance policy holders and beneficiaries.
v)
Insurance and Re-insurance Companies
Insurance and Reinsurance companies will be responsible for designing,
distribution and marketing of agriculture insurance products; settling of claims;
and undertaking of reinsurance arrangements.
vi)
Insurance Industry Associations
There are several insurance related associations that undertake various
functions. Key among these is the Association of Kenya Insurers (AKI) which is
a consultative and advisory body for insurance and reinsurance companies.
Others are the Association of Insurance Brokers in Kenya (AIBK) and the
Insurance Institute of Kenya, (IIK). These associations will be responsible for
guidance to their respective members and lobbying for uptake of agriculture
insurance.
vii)
Farmers, pastoralists’ and fisher folk’s Associations
Farmers, pastoralist and fisher folk are the targeted primary beneficiaries of
agriculture insurance programme. The associations will be responsible for
mobilizing and enlightening their members on insurance products as well as
providing data for agricultural insurance. In addition, the associations may
include bundling insurance in their services.
viii)
Agro-dealers and Other Service providers
Agro-dealers and other service providers are the principal outlets for
agricultural inputs and advisory services to farmers. These actors will play the
critical role of creating awareness and promotion on insurance products, selling
point for policies.
29
ix)
Professional Associations
Some of the professional associations in agriculture insurance include Animal
Production Society of Kenya (APSK), Kenya Veterinary Association (KVA),
The Actuarial Society of Kenya (TASK), Kenya Society of Agricultural
Professionals (KESAP) among others. The professional associations will be
responsible for providing technical information required in product
development by insurance companies. In addition, they will develop and
enforce code of conduct amongst the members.
x)
Financial institutions
Banks and other financial institutions offer agriculture credit, distribute and also
offer advice on agriculture insurance products and services. These institutions
may bundle agriculture insurance products with agricultural credit.
xi)
Training and Research Institutions
The institutions will be responsible for capacity development, innovation and
knowledge management and creating awareness on agriculture insurance among
stakeholders.
xii)
Insurance Intermediaries
Insurance intermediaries will be responsible for designing, distribution and
marketing of the insurance products and includes insurance agents, brokers and
bank assurance.
xiii)
Insurance Service Providers
Insurance service providers offer technical services to the insured and insurance
companies. They include but are not limited to risk managers, loss adjusters,
calculating agents, Crop cutting agents, insurance surveyors, investigators and
claims settlement agents.
xiv)
Development Partners
Development partners will provide technical assistance and financial support for
the implementation of the policy.
xv)
Non-state Actors
These includes Non-governmental Organizations (NGOs), Community Based
Organizations (CBOs) and Faith Based Organizations (FBOs) among others. These
30
will create awareness on agriculture insurance, financial support and advocacy.
4.2 Monitoring and Evaluation
Monitoring and evaluation will be critical in assessing implementation of
agriculture insurance policy. A Monitoring and Evaluation (M&E) framework
will be developed to track implementation progress through data collection,
collation, analysis, information sharing, decision making and enable periodical
reviews to address any new challenges and emerging issues. This will facilitate
information-sharing, decision making and periodical reviews to address any new
challenges and emerging issues.
The two levels of government in collaboration with stakeholders will undertake
continuous monitoring and evaluation to ensure policy implementation and
review to ensure achievement of policy outcomes that deliver on policy
objectives. Monitoring and evaluation for the policy will focus on the following;
1.
Development and institutionalization of a monitoring and evaluation
framework for the agricultural insurance policy;
2.
Enhancing the capacity for carrying out M&E;
3.
Establishment of infrastructure to support monitoring and evaluation of
the policy implementation; and,
4.
Making periodical reviews to address any new challenges and
emerging issues.