Global reinsurer Swiss Re has teamed up with Britam and Oxfam to launch an index-based flood insurance solution in Kenya to protect small-scale farmers.
According to a report from Bizwatch Kenya, the flood insurance solution was developed using a data modelling and satellite imagery to predetermine flood thresholds and provider coverage at an affordable cost.
The product is designed to protect small-scale farmers living along the banks of Tana River in the Tana River Country from the adverse effects of catastrophic floods.
The index-based flood insurance was also jointly designed by AB Consultants an independent market driver in the inclusive insurance space, and Risk Shield, an actuarial firm specialised in designing index-based insurance solutions.
Floods have reportedly become quite frequent in Kenya due to climate change. The index-based flood insurance solution is especially valuable for those who live in areas with a high risk of flooding but may not have access to conventional property insurance products. According to the Kenya Red Cross Society, between 2000 and 2018, floods affected over 3.4 million people in Kenya, causing over 350 deaths and displacing over 300,000 people.
Saurabh Sharma, director emerging consumers at Britam, said the solution uses water level data to determine historical patterns of flooding along the Tana River. It determines the likelihood of floods using these patterns and analyses it with socio-economic information to assess the impacts of flooding on households. The insurance scheme will initially be piloted in the Tana River County.
“This innovative solution has been designed using long-term data on the rainfall and water levels in the Tana River as parameters to pay claims. As these parameters can be monitored remotely, Britam will be able to pay flood related claims swiftly, thereby supporting the local Government and other organisations in their flood mitigation efforts.”
Earlier this year, Swiss Re, Guy Carpenter & ICEYE teamed up to deliver a pilot parametric flood insurance programme for New York City neighbourhoods.
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