New insurance products target crops and livestock sectors

BY PATRICK GITHINJI

A local insurance firm, APA Insurance, has announced plans to introduce a policy cover for the largely ignored crop and livestock sector.

In an Interview with The Standard, the firm’s Chief Executive Officer Ashok Shah said the two policy covers would help farmers to withstand the effects of adverse weather conditions.

"APA is structuring two products that will cater for normal crop insurance and also weather index," Shah said. The products, he said, are initially expected to assist existing farmers in sorghum, sugarcane, maize and wheat business.

Shah said the products will be unveiled in partnership with Kenya Reinsurance Corporation Limited and a group of donors.

Tea sector well covered by insurers.

"We are partnering with Kenya-Re so as to teach farmers the benefits of the insurance cover," he said. But he didn’t quantify the total cost of the investment in this new frontier.

He singled out understanding the new products, as the main challenge to its rolling out. He reckons that farmers do not understand why they should pay for an insurance premium even after a successful season.

tea farmers

However, Shah explained that tea farmers are excluded from the cover because the sub-sector is well covered.

Commenting on livestock, the CEO said they are conducting a study on how to implement the new Radio Frequency Identification technology that uses micro chips to document information. A chip is placed in the stomach of the insured animal to keep track of its health information.

"Each chip has different settings and goes with different characteristics of the individual animal," he said.

The project also seeks to partner with veterinary organisations, both private and public to ensure successful implementation.

He, however, noted that the products would not be extended to cover the East African Community market.