Kenya could introduce insurance cover against losses incurred by households due to disasters and weather-related events, which have been increasing due to climate change.
The move is informed by a case study in the country by Transparency International Kenya and Germany-based non-governmental organisation Germanwatch on a human rights-based approach to climate-risk insurance.
Over the years, increased frequency and severity of extreme weather events, such as drought, due to climate change has posed a threat to basic human rights such as the right to life, water, food, shelter, health, subsistence or social protection.
Globally climate risk insurance schemes have become a vital instrument to deal with the risks that occur after prevention and preparedness strategies have been implemented and to encourage people to adapt and reduce their own risk.
Last year, a new insurance scheme, the African and Asian Resilience in Disaster Insurance Scheme (ARDIS), was launched to help up to four million poor people in Africa and Asia deal with climate disasters.
The insurance scheme — covering droughts in Kenya, Malawi, Mali, Zambia and Cambodia, and tropical cyclones in Myanmar — provides support to women farmers and their families, with plans to expand to cover floods.
The scheme is expected to meet nearly one per cent of the ambitious goal of G7 countries to increase access for around 400 million uninsured people in developing countries to insurance products that protect against climate risk.
ARDIS is led by VisionFund International — the microfinance subsidiary of development charity World Vision — and Global Parametrics, a new venture funded by the United Kingdom’s Department for International Development and by the InsuResilience Investment Fund, set up by KfW, the German Development Bank, on behalf of the German Ministry for Economic Co-operation and Development.
The African Development Bank also approved the Africa Disaster Risks Financing (ADRiFi) Programme, the institution’s first climate risk management programme to boost resilience and response to climate shocks in regional member countries.
The comprehensive programme, open to regional member countries, is expected to enhance their ability to evaluate climate-related risks and costs, respond to disasters and review adaptation measures at both national and sub-national levels.
The programme, whose initial phase is expected to run from 2019 to 2023, will also facilitate initial financing for countries in need of support.
Transparency International Kenya and Germanwatch say climate-risk insurance schemes should be non-discriminatory and should include marginalised groups.
Also, the mechanisms for managing complaints and feedback should be transparent and accountable.
Other human-rights based features of such insurance schemes are participation and empowerment of those affected and respect towards and building on existing structures in the country or region.
The insurance scheme is expected to serve the poorest and most vulnerable population and will involve contributing a small, regular fee where the beneficiaries will receive a payout in the event of an extreme event.
“Payouts are not based on the settlement of proven claims but are carried out when a threshold value on an index, such as a rainfall index, is triggered,” they said.