Delineation of Unit Areas of Insurance to Support HOA DRIVE Project

The HOA DRIVE project has taken a significant step forward in the design and implementation of an Index-Based Livestock Insurance (IBLI) product tailored for Ethiopia, Kenya, and Somalia. This initiative aims to define homogenous Unit Areas of Insurance (UAIs) and design a drought index insurance product that aligns with the agroecological, seasonal, and livelihood needs of pastoral households in these three countries. HDA, along with our partner AXA Climate has been supporting our client and HoA DRIVE project implementer Zep-Re PTA Insurance on the Design and Implementation of Index-Based Livestock Insurance in Ethiopia, Kenya, and Somalia.

Delineation of unit areas of insurance (UAI)
The work of the consortium involved designing a drought index insurance product that is suitable for the agroecological, seasonal and livelihood needs of pastoral households in Ethiopia (5 regions), Kenya (9 regions), and Somalia (6 regions). The map below shows the locations of the target regions in the respective 3 countries.

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​The work was divided into two phases, a clustering phase and a ground validation phase. The clustering phase methodology included (a) the definition of minimum unit areas of insurance (b) data downloading and initial spatial aggregation (c) utilizing a unique clustering algorithm and finally (d) the selection of the optimal number of clusters or unit areas of insurance (UAI). 

The second phase of the project is the validation of UAIs through consultation with local stakeholders in the proposed areas, a process known as ground truthing. The specific objectives of the ground validation are the following (a) to validate the established UAIs in project areas (b) describe the biophysical and socioeconomic characteristics of the UAIs and (c) to disseminate information on IBLI product in the project areas.

As a result of the work by HDA and our partner AXA Climate, pastoralists in the targeted regions of Ethiopia, Kenya and Somalia have been able to access Zep-Re’s index based livestock insurance and increase their resilience to droughts. ​​​