Launch Partners

Tuesday, January 31, 2023

Launch Partners

Takaful Insurance of Africa to introduce microTakaful parametric solutions

Nairobi-based Takaful Insurance of Africa (TIA) is looking to introduce a number of products including microTakaful in the coming months as part of its reworking of its existing Index Based Livestock Takaful (IBLT) products, Sumayya Hassan, CEO of TIA, told ISFI.

“We recently conducted a survey on IBLT for the purpose of better understanding participants’ views on the same to help us improve the product. We intend to launch the report in the next couple of weeks. Thereafter, we will finalize the review of the products, which we anticipate should be by end of this year or early January 2023,” Sumayya shared.

IBLT products, which are parametric Takaful solutions, protect policyholders against prolonged lack of pasture as a result of severe droughts, helping pastoralists sustain their livestock during drought seasons. Policyholders are paid when the available pasture falls within the 20th percentile. TIA is reworking its IBLT products to make it more comprehensive to enable it to take care of livestock owners.

According to Sumayya, TIA is currently curating several products for the microTakaful sector as well as for the more vulnerable members of society including lower-income women breadwinners and informal sector workers.

“We are also developing other products for entrepreneurs as well as groups with specific needs such as fisherfolk among others,” Sumayya added.

Pastoralist and agro-pastoralist households in the arid and semi-arid lands of Kenya are especially vulnerable to climate change, with households at peril of being pushed further into poverty as a result of a loss of livestock due to droughts.

The lack of Shariah compliant product offerings puts Muslim agriculturalists at a further disadvantage, Sumayya shared. According to the Kenyan population and housing census of 2019 conducted by the Kenyan National Bureau of Statistics, Muslims represent 10.9% of the Kenyan population.

As a result of the unique challenges for Muslim pastoralists in Kenya, TIA, which was founded in 2008 and licensed in 2011, has partnered with the International Livestock Research Institute to develop its first Takaful parametric policy which combines a financial risk mitigation instrument with the use of satellite imagery to compensate policyholders with a triggered payout before drought-induced losses occur.

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