Nairobi — Low insurance penetration and high premiums are leaving millions of farmers in Kenya and other African countries vulnerable to climate‑related shocks. Although agriculture contributes roughly 30 % of Sub‑Saharan Africa’s GDP, coverage remains limited. Phocas Nyandwi, Regional Director at Africa Re, notes that Africa accounts for only 2 % of global agricultural insurance premiums, with fewer than 17 % of farmers insured. He attributes this to a lack of understanding of agricultural insurance, its benefits, and the high cost of premiums.
The consequences are far‑reaching, especially as extreme weather events such as droughts and floods become more frequent, threatening food security and rural livelihoods across the continent. Isaac Magina, Agriculture and Climate Insurance Lead at Africa Re, stresses the need for greater investment in building underwriters’ capacity to manage climate‑related risks. He points out that climate insurance is a relatively new concept and most underwriters lack the expertise to use the necessary parameters for insuring climate risks. Africa Re is therefore focusing on developing technical capacity within the insurance industry to better understand and underwrite these risks.
Industry experts agree that scaling up agricultural insurance is essential for protecting farmers against climate shocks and ensuring regional food security. However, high premiums, limited awareness, and weak policy frameworks continue to impede progress. In Kenya, total insurance penetration is about 2.4 % of GDP, well below the global average of around 7 %. The Insurance Regulatory Authority (IRA) attributes the low penetration in agriculture to farmer skepticism stemming from delayed claim settlements and a lack of trust in insurers. Agricultural insurance accounts for less than 1 % of total insurance premiums in Kenya.
Addressing these challenges requires increased awareness and education about the benefits of agricultural insurance, stronger policy frameworks, and efforts to build trust between farmers and insurers.
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