Agriculture insurance in the country remains low, despite the sector accounting for a third of Kenya’s annual economic output, according to the Association of Kenya Insurers (AKI). AKI senior manager Birian Akwir attributed this to lack of commitment by the government and low development of digital products. “As an industry, we need to focus our efforts in improvement and concentration of micro-insurance,” Akwir said. During the period ending December 2018, the gross written premium under agriculture insurance reduced to Sh716.2 million in 2018 from Sh822.7 million in 2017, a 12.95 per cent decline. Crop insurance contributed 38 per cent of these premiums whereas livestock insurance contributed 62 per cent. The total claims for agriculture insurance were Sh694.9 million in 2018, a 15.25 per cent decline from Sh819.99 in 2017, a reduction attributed to better weather conditions experienced in 2018. Overall, technical loss ratio for agriculture was 97 per cent, crop insurance had 121 per cent while livestock insurance had 83 per cent loss ratio. Out of 52 registered AKI members, only 10 companies offer the agricultureinsurance. This, despite great potential in the sector occasioned by losses from drought, floods, pests and diseases, fires and natural disasters, and loss through transport and storage. Insurers now anticipate a high uptake from index-based insurance and micro-insurance business which became effective on July 23. The Act also allowed for micro-insurance business, that is accessed by the low income population segments, including the underserved markets. However, according to a maize farmer, Kipkorir Menjo in Soi, Eldoret North, the new regulation is not published while most farmers need to be aware of it. "I know of few who used to take insurance but once it changed, quite a number has not taken the policy," said Menjo who is also a director of the Kenya Farmers Association. He claimed that some insurers fail to compensate in most cases in the occurrence of the risks. "If the companies do not honour their word in case of a loss, then it discourages us," he said. The index-based insurance was established after the amendment of the Insurance Act. The Finance Bill 2018 proposed the doing away with the traditional indemnity-based insurance, said to have challenges due to the requirement for assessment of losses to be conducted before any payment is made. Former National Treasury's Cabinet Secretary, Henry Rotich proposed the introduction of index-based insurance, saying it would lead to higher uptake of insurance by farmers by boosting obscure insurance especially crop failure segment. The insurance industry has still been faulted for lack of the right insurance products. This has left majority of the population uncovered and exposed to risks mainly in businesses, agriculture, and health where a majority of Kenyans cannot afford insurance covers. UK-based consultant firm MarketMinds said underwriters should work closely with tech firms to develop mobile phone-based products to increase penetration level in the country. Source - https://www.the-star.co.ke