Britam Holdings Plc has launched an index-based flood Insurance solution in partnership with Oxfam in Kenya and global re-insurer Swiss Re. The solution aims to protect small-scale farmers living along the banks of the Tana River in Tana River County from catastrophic floods.
Using data modelling and satellite imagery, the solution predetermines flood thresholds to provide coverage at an affordable cost.
The insurance scheme will initially be piloted in Tana River County. The solution uses water level data to determine historical patterns of flooding along the Tana River and analyzes it with socio-economic information to assess the impacts of flooding on households.
“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 & other organizations in their flood mitigation efforts,” said Saurabn Sharma, Director Emerging Consumers at Britam.
Developed with support from Oxfam in Kenya, who will also provide the initial premium financing. The overall goal of the risk transfer solution is to enhance local communities’ ability to absorb climate shocks, improve their ability to reduce and manage risk, and maintain food security.
Also, AB Consultants an independent market driver in the inclusive Insurance space and Risk Shield, an actuarial firm specialized in designing index-based insurance solutions jointly helped in designing the index-based flood insurance.
Barbara Chesire the Managing Director at AB Consultants, said, “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.”
Swiss Re will play a role of providing reinsurance support to Britam for underwriting the insurance solution.
“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’’ said Kudzai Bingepinge, Head P&C Solutions MEA (Middle East and Africa) at Swiss Re
According to the Kenya Red Cross Society, floods affected over 3.4 million people in Kenya between 2000 and 2018, causing over 350 deaths and displacing over 300,000 people. The index-based flood insurance solution is a breakthrough in addressing this gap and will be an important tool for governments, donors, and humanitarian NGOs working to build more resilient communities in the face of climate change and other environmental challenges.
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