REPUBLIC OF KENYA, MINISTRY OF AGRICULTURE, LIVESTOCK AND FISHERIES

State Department of Livestock

REQUEST FOR EXPRESSION OF INTEREST FOR PROVISION OF LIVESTOCK

INSURANCE IN THE ARID AND SEMI ARID AREAS OF KENYA

Background

In recent years droughts have become frequent and severe creating serious challenges for households in the arid and semi-arid lands (ASAL) of the country that rely on livestock as the main source of livelihood. The droughts also have negative consequences on the overall performance of the national economy. As regards livestock-based economies, severe drought poses the greatest risk burden to pastoralists and drought-related livestock mortality is the main source of vulnerability. In order to cushion pastoralists against loses of their livestock as a result of drought, the Ministry of Agriculture, Livestock and Fisheries has designed a Livestock Insurance Scheme that will use satellite generated weather based indices for purposes of insuring livestock in the ASAL’s of the country.

Objective of the Scheme

The main objective of the Scheme is to use insurance to cushion Kenya’s pastoral communities against drought related loss of livestock.

Scope of the Scheme

The program will provide insurance cover for livestock keepers in the arid and semi-arid counties of the country. It will start in 2014/15 financial year to cover Wajir and Turkana Counties and be rolled out to all the ASAL counties starting from 2015/16. The livestock insurance program will use satellite-based Normalized Difference Vegetation Index (NDVI) and hence will be an Index Based Livestock Insurance (IBLI) product.

Design of the Scheme

The Ministry of Agriculture Livestock and Fisheries will purchase an IBLI cover against drought on behalf of vulnerable pastoralists. Building on the research and experiences from the International Livestock Research Institute (ILRI), the Ministry intends to purchase an insurance product that issues payouts based on a pasture degradation NDVI index. This will be a macro coverage, where the Ministry will be the policy holder and covered households will be the beneficiaries. In case of a drought that triggers a payout, the insurance companies will pay claims directly to the beneficiaries.

Eligibility

To provide insurance cover to the livestock keepers in the ASAL’s, the Ministry of Agriculture, Livestock and Fisheries now invite eligible insurance companies to submit an Expression of Interest to provide insurance through the Index-Based Livestock Insurance model. The interested companies should demonstrate how they intend to develop the necessary infrastructure and capacity to offer the livestock insurance products beginning in Wajir and Turkana Counties and then scaling up the program to all ASAL counties in the medium and long term. In addition to providing the company profile and evidence of involvement in livestock insurance, the companies should indicate how they intend to develop appropriate infrastructure and operating systems to market, underwrite and administer both the macro-level livestock insurance program and the voluntary purchase IBLI products.

Completed expression of interest documents should be enclosed in plain sealed envelopes clearly marked “Expression of Interest for provision of livestock insurance in the arid and semi arid areas of Kenya,” and must be received on or before 2nd September, 2014 at 11.00 am East African time: The expression of interest documents should be placed in the Ministry’s tender box situated at the main reception, Kilimo House on or before the said date and time at the address below:

The Principal Secretary,

State Department of Livestock,

Kilimo House,

P.O Box 34188-00100,

Nairobi,

Kenya.