Duncan Khalai (left), of ILRI’s IBLI project, and Amina Farah, TIA’s director of communications (second left), receive the Insurance Innovations Award 2017 at the Africa Re’s Awards gala dinner held on 22 May 2017 in Kampala, Uganda (photo credit: ILRI).
This article is written by Duncan Khalai, market and capacity development specialist in ILRI’s IBLI project, and edited by ILRI communications officer Dorine Odongo.
The announcement was made at the African Reinsurance Corporation (Africa Re)’s Insurance Awards gala dinner held on 22 May 2017 at the Serena Kigo Hotel, in Kampala, Uganda. Together with its commercial partner, Takaful Insurance of Africa (TIA), the IBLI project of the International Livestock Research Institute (ILRI) won in the ‘Insurance Innovations’ category.
The Africa Re’s innovation of the year prize is given to an insurance company that excels in the use of technology to launch a breakthrough product/service or a new and innovative distribution channel or method. ILRI and TIA featured among 36 other applicants from across Africa and was ranked top out of 5 nominees. The panel of judges considered several criteria, including: Innovative insurance products accessible to a large clientele, innovative value proposition to pressing or neglected community risks, innovative response to emerging risks, breakthrough in technological choices and innovative ways of communicating with clients.
IBLI has been in partnership with TIA since 2013, when they introduced, for the first time in Africa, an Index-Based Livestock Takaful (IBLT) policy, which combines an Islamic-compliant financial instrument with innovative use of satellite imagery to determine forage availability.
In Mar 2014, TIA made its first payouts under IBLT to livestock-insurance-covered pastoralists in Wajir County, located in the drylands of northeastern Kenya, who had taken out insurance on their sheep, goats, cattle and camels and who had suffered a prolonged drought and loss of forage.
IBLT is now available in six counties found in the arid parts of Kenya: Wajir, Mandera, Garissa, Marsabit, Isiolo and Tana River.
In Mar 2017, TIA paid out Ksh10.7 million (over USD100,000) in indemnities to 1,970 beneficiaries following a drought occasioned by failed rains in Kenya’s 2016 short rains season. To date, this insurance company has insured more than 12,000 livestock herder beneficiaries across Kenya’s arid and semi-arid lands.
Venturing into Kenya’s vast arid and semi-arid lands—characterized by their poor infrastructure, harsh weather and scarce financial services—is uncommon for commercial entities looking to make profits. Amina Farah, TIA’s director of communications, while receiving the award from the speaker of Uganda’s national parliament, the Honorable Rebecca Kadaga, reiterated the company’s commitment to continuous efforts to innovate cost-effective ways to spread IBLI across the continent.
ILRI and TIA acknowledge the essential contributions of their partners—including Australia’s foreign aid agency (AusAID), the UK’s Department for International Development (DFID), the European Union (EU), the Government of Kenya, the Unites States Agency for International Development (USAID) and the World Bank, along with many other technical and implementing collaborators—for their unstinting support in ensuring the sustainable commercial viability for this novel livestock insurance product, which is now protecting Kenya’s never-before insured herding communities.
There has been increasing momentum in the adoption and scale of the IBLI product by various partners, from private insurance companies to Kenya government departments. This award will go a long way in further catalyzing the product’s growth and partnerships so as to widen the reach of both IBLI’s generic and Sharia-compliant products.
African Insurance Awards was initiated in 2015 by Africa Re to foster best corporate management, leadership and governance as well as innovative and sustainable growth of the insurance sector in Africa by honouring distinguished companies and leaders of insurance companies that have raised exceptional standards of competence and achievement and demonstrated an unprecedented level of insurance industry leadership.