Perceptions of the Service Delivery and Value of the Kenya Livestock Insurance Programme (KLIP)

The Kenya Livestock Insurance Programme (KLIP) is a social livelihood protection scheme which is built on index insurance principles. Targeted at some of the most vulnerable pastoralists in Kenya’s Arid and Semi-Arid Lands (ASAL) regions, the Government of Kenya (GoK) pays domestic insurance companies an annual premium to provide financial protection against drought for more than eighteen thousand vulnerable households. Livelihoods in these regions are especially challenged during two annual dry seasons, when droughts can cause poor quality of forage, in turn increasing the likelihood of livestock mortality. If satellite-derived measures of forage scarcity (based largely on a Normalised Difference Vegetation Index, NDVI) fall below the predetermined threshold KLIP for an area insured under the programme (unit area insured, UAI) makes claim payments to all pastoralists in the registered under the programme for that area.1 Crucially, these index-linked pay-outs are designed to be made in time to allow pastoralists to take action to prevent costly loss of livestock from occurring, reducing substantially the financial and human impact of droughts. To increase the speed and access of KLIP, insurance pay-outs have been linked, where available, with mobile money account – namely ‘MPesa’ – which is widely used across Kenya.

In seeking to assess the effectiveness of KLIP and add to our understanding of index-based insurance this study explores perceptions related to the delivery and value of KLIP amongst beneficiaries. In particular, it analyses strengths and weaknesses of KLIP’s registration, administration and roll-out from the perspective of those in targeted areas of Northern Kenya. Insights are gathered across four ASAL counties using a combination of quantitative and qualitative sources, including a large household survey, focus group discussions and key informant interviews.