Snaking through several counties, the Tana River is Kenya’s longest river, covering approximately 1,000km.
Principally originating from Mount Kenya in Nyeri County, it is one of the more significant natural resources in Kenya with nearly two-thirds of Kenya’s electricity needs being generated from the series of dams along it.
The river also runs through Kenya’s semi-arid lands such as parts of Garissa in the northeastern region and Tana River in the Coast, where it is a water source for irrigation and domestic use and supports a rich wildlife ecosystem in the surrounding areas.
For residents of Madogo Ward in Tana River County, the river is a tale of joy and pain experienced in near equal measure depending on the season.
The river supports various economic activities in the region, including pastoralism, crop farming, fishing and harvesting of natural resources.
During the rainy season, in contrast, the river overflows, causing flooding, which often destroys people’s livelihoods, rendering them destitute.
Mohamed Ousmane, a resident of Madogo, recounts the events between September 2023 and May 2024 with pain written all over his face.
He chokes on his words as he narrates how he lost virtually everything he owned when the Tana breached its banks twice during this period.
In a flash, his home was gone, and so was his livelihood, and his sense of security. The raging floodwaters had rendered his efforts useless, leaving him in a precarious position.
“The floods were relentless,” he recalls, his voice heavy. “It felt like an unending nightmare. My rental houses and livestock, my main sources of income, vanished overnight.”
Ousmane, a religious teacher from Mororo at the border of Tana River and Garissa counties, is just one of thousands of residents whose lives were upended by the floods.
Most of his neighbours are low-income earners, eking out a living through informal trade and small-scale farming and pastoralism.
The floods not only destroyed homes but also disrupted livelihoods, education, and the overall fabric of the community. Schools were marooned, leaving thousands of school-going children without access to education.
According to the Kenya Red Cross Society, which provides emergency assistance in times of disaster, over 10,200 households were affected by the floods in Tana River County alone.
Many were forced to move to makeshift camps and rescue centres. The future looked dark and uncertain.
As the flooding disaster raged, some 400km away in Nairobi, officials of Britam’s microinsurance division were closely monitoring the events and crunching the numbers.
The year before, Britam, in partnership with Oxfam and Swiss Re, introduced the Index-Based Flood Insurance (IBFI) to the region.
The solution, which is powered by technology, was jointly designed by AB Consultants, an independent market driver in the inclusive insurance space, and Risk Shield, an actuarial firm specialised in designing index-based insurance solutions. Oxfam provided the initial premium financing.
The overall goal of the risk transfer solution is to enhance the local communities’ ability to absorb climate shocks, improve their ability to reduce and manage risk and maintain food security.
The innovative insurance model is based on weather data and river levels. When the river surpasses a predetermined threshold, insured households receive a payout, providing immediate relief and enabling them to rebuild.
Ousmane was one of the early adopters.
Within a couple of weeks, Britam made a payout of Sh15 million to 300 households in Madogo Ward. This was a pleasant surprise to families who only weeks earlier had lost nearly all hope.
The payout played a pivotal role in helping affected households recover from the immediate impacts of flooding, while also promoting long-term economic and social stability in the region.
It saw Britam and the Tana River County Government officially sign a Memorandum of Understanding (MoU) in a significant step towards scaling the flood insurance solution to cover more families in the county. The scaling of the coverage is designed to safeguard and enhance the resilience of communities against the impacts of floods.
“The insurance payout was a welcome reprieve,” Ousmane says. “It helped me rebuild my life, piece by piece,” he adds.
The payout, disbursed in three tranches, provided crucial support to Ousmane and hundreds of his neighbours.
Mwanaharusi Abala, a charcoal and snack vendor, used the money to rebuild her home and restart her business, while Yusuf Jawa, a tailor, invested in his business and purchased school uniforms for his children.
“This approach is a game-changer,” says the Head of Innovation at Britam Microinsurance Liza Maru. “It offers a swift response to a disaster that often leaves vulnerable households with nothing.”
The flood insurance solution, the first of its kind in East Africa, was developed using data modelling and satellite imagery to predetermine flood thresholds and provide affordable coverage.
It utilises water level data to analyse historical flooding patterns along the Tana River. By analysing these patterns with socio-economic information, the solution assesses the potential impacts of flooding on households.
“We want to scale this programme to reach more vulnerable households,” Ms Maru adds. “Our goal is to build resilience within the community beyond floods.”
She said Britam would leverage partnerships to make the flood insurance product more affordable. The plan is also to make it seasonal.
Floods have become frequent in Kenya due to climate change. The index-based flood insurance solution is especially suited for individuals and families living in areas with a high risk of flooding but may not have access to conventional property insurance products.
According to the Kenya Red Cross Society, between 2000 and 2018, floods affected over 3.4 million people in Kenya, causing over 350 deaths and displacing over 300,000 people. Over 200 people died, and thousands displaced this year alone.
Mohammed Abubakar, an environment officer in Tana River County, explains that owing to climate change such floods will increase in intensity. He emphasises a focus on building resilience.
“The floods caused widespread destruction, displacing people and ruining livelihoods. The insurance payouts have been crucial in helping people rebuild and regain stability,” he said.
The growing intensity of natural disasters amplifies the need for formal and informal insurance solutions that protect households, farmers and businesses as the emerging risks are underserved in the market, despite climate change causing rising temperatures and rainfall variations that lead to droughts or floods.
