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Cooperative insurer launches new project to cover over 250,000 Kenyan farmers with livestock microinsurance

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Kenyan cooperative insurer CIC Insurance Group (CIC) on Monday this week launched a five-year project to provide low-income dairy farmers with livestock microinsurance in Kenya.

This venture has been formulated as part of the International Cooperative and Mutual Insurance Federation’s (ICMIF) 5-5-5 Mutual Microinsurance Strategy, which aims to enable microinsurance delivered by mutual and cooperative insurers to reach scale in emerging market countries. The 5-5-5 Strategy is a unique initiative which aims to build the resilience of low-income communities by ensuring the provision of low-cost microinsurance.

Kenya is classified as a low-income country, with 33.6% of its population surviving on an income of less than USD 1.90 per day (UN Human Development Report, 2016). The majority of this population resides in rural areas and relies on agriculture including livestock farming for their livelihoods and which is the backbone of the Kenyan economy. However, livestock in Kenya are vulnerable to a variety of risks and the sudden death of a cow can have serious impacts upon a family’s livelihood.

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Tom Gitogo, Group CEO, CIC confirms the proposed impact of the project: “Over the next five years, we plan to issue over 250,000 livestock microinsurance policies to previously uninsured low-income farmers, equating to 500,000 cows insured. CIC will scale up our livestock microinsurance product by partnering with dairy cooperative associations as part of a holistic approach to improving the lives and livelihoods of low-income farmers and their families”.

CIC’s livestock microinsurance policy, first launched in 2009, is a cattle mortality cover for low-income dairy farmers. Through the provision of affordable insurance protection, the farmer is shielded from the financial losses they would otherwise face. As well as providing affordable risk-mitigation solutions, CIC’s livestock policy includes targeted actions on financial literacy training for the intended recipients, as well as access to veterinary services and improved animal husbandry practices. By building an awareness of the role of insurance and providing strategies for risk mitigation, CIC’s project will support the development of a long-term “insurance-friendly” population.

Today’s launch event, hosted by CIC, will be attended by key stakeholders of the project including leaders from CIC, ICMIF representatives in addition to representatives from ICMIF member companies who have been providing support to CIC’s project.

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The project launch event will also include a detailed presentation by researchers SBO Research and ACRE Africa on the ICMIF country diagnostic report into the landscape of cooperative and mutual microinsurance in Kenya, which was used as the basis of CIC’s current project.

The 5-5-5 Strategy in Kenya has so far been supported by two ICMIF member companies; P&V Insurance (Belgium) and Thrivent Financial (USA). Both organisations have been instrumental in helping CIC to formulate the findings from the country diagnostic report into an evidence-based strategy on which to expand their microinsurance operations. Both organisations have even seconded members of their staff to assist CIC’s team with this by visiting the company in Kenya. Fabian Melis (P&V) spent three months in Kenya with CIC and helped develop the project business plan. Also, Dan Wanous and Ellie Anderson (Thrivent Financial) will be in Kenya for two months arriving later in September 2018 to continue this assignment and help future-proof the success of the venture.

We Effect (Sweden) are also providing financial and technical support to CIC’s livestock microinsurance project. We Effect was founded in 1958 to support the development of democratic organisations and societies that have the capacity to articulate the rights and needs of their members in respect of work, influence, services, incomes and livelihoods. ICMIF member Folksam is a founding and active owner of We Effect.

Sabbir Patel, CEO, the ICMIF Foundation said: “We are extremely excited about the launch of CIC’s project which will have a real impact to low-income Kenyan farmers and we really appreciate all the hard work of CIC and all their partners. We believe this collaboration between like-minded organisations will be the key strength for this project to succeed.”

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The ICMIF 5-5-5 Mutual Microinsurance Strategy aims to extend the provision of mutual microinsurance in five emerging market countries to an additional 5 million, previously uninsured households over a period of five years. The intended beneficiaries of the 5-5-5 Strategy reside in poor communities, and the ultimate objective is to build resilience in these communities by providing a mechanism to protect them from the everyday risks they face. The project in Kenya is the third of the five country intervention programmes to have been launched. The 5-5-5 Strategy is predominantly supported directly by ICMIF member companies, and a total of 21 members in 15 countries have so far come together to support the 5-5-5 project.

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