APA Insurance, Kenya has won $110,000 in the 10th European Microfinance Award in recognition for its response to “Strengthening Resilience to Climate Change”.
Speaking at a ceremony held at the European Investment Bank in Luxembourg, Apollo Group CEO Ashok Shah, of Kenya said that it is the poor in developing countries who feel the most impact of these climatic changes.
“Since 2006, Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, the European Microfinance Platform and the Inclusive Finance Network Luxembourg have been awarding a EUR 100,000 (USD 110,000) prize to the winner and, starting two years ago, EUR 10,000 (USD 1,100) to the two finalists,” said APA Insurance in a statement.
This year’s winner, APA Insurance Ltd, is a Kenyan insurance company that provides index-based agriculture insurance to cover yields and livestock, thus providing farmers with a safety net. Index-based insurance is an innovative approach to insurance whereby payments are linked to easily measured environmental conditions known as an “index” (e.g. the level of rainfall, yields or vegetation levels as measured by satellite) directly connected to the loss of agricultural output. When the index exceeds a particular threshold, farmers automatically receive compensation. In Kenya, where over 75 percent of farmers are smallholders, who are especially vulnerable to the economic impacts of climate change, APA Insurance Ltd currently covers more than 350,000 families whose livelihoods are largely based on agriculture.
“I am extremely honored to receive such an important award – the European Microfinance Award 2019,” Ashok Shah, Apollo Group CEO.
“I accept this award with many thanks on behalf of APA and we are very grateful for the recognition we have received for our work in Kenya. This year’s Award couldn’t be timelier. Extreme events – including drought, flooding, storms, fluctuating temperatures, and other climatic changes – are occurring with greater frequency and intensity, increasing risks to health, livelihoods, food security, water supply, economic growth and human rights,” he added.
Kenya’s government in 2015 launched the Kenya National Agricultural Insurance Program, designed to address the challenges that agricultural producers face when there are large production shocks, such as droughts and floods.
Under APA, Agriculture Insurance is categorised into theree products:
Area Yield Index Crop Insurance: This is a multi-peril micro-insurance product rolled out together with the Government of Kenya and other insurers. It covers smallholder maize and wheat farmers against poor yields due to poor weather and natural catastrophes.
Index-based Weather Insurance: This cover compensates farmers for crop damage as a result of deficit or excesses in weather conditions such as temperature, sunlight, wind speed or rainfall resulting in losses during the length of the crop growth cycle up to physiological maturity.
Livestock Insurance: This compensates livestock keepers upon accidental death of their domesticated animal of economic value through accidents, illness, or complications while giving birth. Farmers are also compensated for the theft of their animals.
While increasingly unpredictable weather conditions and climate change threaten the already precarious situations in developing countries, Paulette Lenert, Luxembourg Minister for Cooperation and Humanitarian Affair, who chaired the High Jury of the European Microfinance Award, noted that this year’s Award illustrates that inclusive finance has an essential role to play in strengthening the resilience of vulnerable communities to the effects of climate change, which threaten the livelihoods of disadvantaged communities, especially those relying on agriculture, forestry or fisheries.”
Dr Hoyer, President of the European Investment Bank, emphasised that “Climate Change is an existential threat for many nations and communities. How we combat and adapt will shape our future. The three finalists of the European Microfinance Award, and APA Insurance Ltd in particular, are delivering innovative solutions for the financial sector to support vulnerable communities in tackling the effects of climate change.”
Also, present at the European Microfinance Awards was Ambassador Joshua M. Mugodo, from the Embassy of the Republic of Kenya & Mission to European Union.