Global reinsurer Swiss Re is to provide reinsurance for a new index-based flood insurance solution in Kenya, which is set to be launched by Britam in partnership with Oxfam, and which aims to protect small-scale farmers from the impact of catastrophic floods.
The solution, developed by Nairobi-based insurer Britam, uses data modelling and satellite imagery to predetermine flood thresholds and is initially set to 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,” said Saurabh Sharma, Director Emerging Consumers at Britam.
“As these parameters can be monitored remotely, Britam will be able to pay flood related claims swiftly, thereby supporting the local government & other organizations in their flood mitigation efforts.”
Swiss Re will provide reinsurance support to Britam for underwriting this insurance solution.
“We are thrilled to be launching this innovative new solution in Kenya in partnership with Britam,” said Kudzai Bingepinge, Head P&C Solutions MEA (Middle East and Africa) at Swiss Re. “Floods are a major challenge for many communities in Kenya, and we believe that our index-based flood insurance solution will help to reduce the impact of floods and protect vulnerable households and businesses.”
Developed with support from Oxfam in Kenya, who will provide the initial premium financing, the overall goal of the risk transfer solution is to enhance the local communities’ ability to absorb climate shocks, improve their ability to reduce and manage risk and maintain food security.
“Oxfam has been at the forefront of supporting communities affected by natural disasters in Kenya. Due to climate change, events such as floods have become quite frequent,” said David Abudho, Social Protection Strategist at Oxfam in Kenya.
“We therefore decided to work with Britam to introduce this innovative solution. We hope the stakeholders lend their support, to replicate and scale up this innovative solution, so that the most vulnerable households across the country can be protected against floods.”
The index-based flood insurance was also jointly designed by AB Consultants and Risk Shield, an actuarial firm specialized in designing index-based insurance solutions.
Barbara Chesire, the Managing Director at AB Consultants, commented: “This solution is especially valuable for those who live in areas with a high risk of flooding but may not have access to conventional home insurance due to factors such as location or cost. This provides a more accessible and affordable option for such households.”
