Insurance Policy Design and Market Adoption in Livestock Insurance Products Among Smallholder Farmers in Kenya's Rift Valley

Livestock insurance products have been introduced in Kenya's Rift Valley to protect smallholder farmers against risks such as drought and disease, but their effectiveness is not well understood. A mixed-methods approach combining quantitative data from surveys with qualitative insights from focus group discussions was employed to explore farmer perceptions and policy effectiveness across different livestock insurance schemes. The analysis revealed a significant disparity in adoption rates between farmers who received detailed information about policies versus those who did not. Farmers preferred products that offered higher payouts for losses of key animals like cattle, which constitutes the majority of their assets. Current policy designs lack clarity and specificity around payout structures, leading to low market penetration and farmer dissatisfaction. The study highlights a need for clearer communication strategies to improve uptake. Insurance providers should prioritise simplifying product offerings and clearly communicating key features such as coverage limits and payout mechanisms to increase market adoption rates among smallholder farmers in Kenya's Rift Valley.