Appraising Formal and Informal Insurance Approaches Within Pastoralist Social Networks in Northern Kenya

Abstract

Pastoral resource scarcity resulting from climate shocks, particularly drought, impoverishes and adversely affects pastoralists in arid and semiarid lands. Understanding how pastoralists apply established and contemporary risk management approaches is critical for policy and planning on social protection for vulnerable communities. Hence, this study sought to describe existing informal risk-sharing approaches and explore index-based livestock insurance (IBLI) as a formal risk-sharing approach employed by pastoralists to cope with pastoral resource scarcity. Based on the socioecological and disaster approaches to resilience theory, this research employed a qualitative descriptive design. Using semistructured in-person interviews, data were collected from a sample of 69 household respondents, a focus group discussion, and 4 key informants. This study found that although social networks enhance resource sharing, adverse climate stressors were strangling the traditional resource-sharing structures of pastoralism. As a result, this study noted a potential shift from collective risk sharing to household-based or self-insurance among pastoralists. IBLI uptake was recorded as low at 17% due to low awareness levels, a slowed premium sale supply, and a plausible product trust deficit. This study affirms that formal insurance can leverage informal insurance social networks to assist households in coping better with climate shocks, thus enhancing livelihood resilience. The study recommends establishing a framework that integrates both the traditional and modern approaches to risk sharing. Additionally, a focus on designing formal risk-sharing products that cater to household and collective shock recovery may be promising.