El Niño and Kenya’s Short Rains: Is the Kenya Insurance Market Ready?

El Niño is firmly established and strengthening. As at September 2026, international climate agencies expect it to persist into early 2027. Closer to home, the Kenya Meteorological Service is forecasting above-average rainfall across much of Kenya during the October to December short-rains season, with prolonged wet spells and occasional storms expected in some areas.

Forecasts are, of course, not claims predictions. Above average rainfall does not mean that every insured location will flood. But Kenya’s recent experience demonstrates the potential scale of the exposure. The Government’s Disaster Risk Financing Strategy 2026 to 2030 estimates that the 2023-2024 floods caused approximately KSh187.82 billion in damage and losses. For insurers, reinsurers and businesses, the approaching rains therefore provide a useful opportunity to ask a more difficult question, that being “if another significant weather event occurs, will the insurance arrangements respond in the way everyone expects?”

That question goes beyond whether sufficient limits have been purchased. Major weather losses often expose issues in policy wordings and claims arrangements that attracted relatively little attention when the risk was placed.

A definition of “flood”, “storm” or “windstorm”, for example, may appear straightforward until the actual meteorological circumstances of a loss are tested against it. Natural catastrophe limits can raise equally difficult questions. Does the limit apply to each loss, each occurrence or across the policy year? If a loss involves flooding, wind and water damage arising from the same weather system, is there one occurrence or several? Do sub-limits for debris removal, expediting expenses, increased costs or other extensions sit within the catastrophe limit, or potentially respond in addition to it?

These are not merely drafting points. Experience from complex weather claims in other markets (recent floods in Dubai as a case in-point that we were heavily involved in) demonstrates how quickly questions about definitions, aggregation and the interaction between policy limits can materially alter the value of a claim. Difficulties can be compounded where the direct policy, endorsements, financing arrangements and reinsurance programme are not fully aligned, or where it is unclear who has authority to investigate, negotiate or settle a loss.

For insured businesses, preparedness should therefore include more than physical flood mitigation. This is an appropriate time to revisit declared values and asset schedules, test whether business interruption assumptions still reflect current operations and supply chains, and examine catastrophe limits, deductibles and key policy definitions. Businesses should also consider whether they could quickly assemble the evidence required to substantiate a significant claim, including contemporaneous photographs, weather information, maintenance records, financial information and evidence of mitigation measures.

Insurers and reinsurers face the corresponding challenge. Portfolio accumulations and potential aggregation across locations should be understood before an event occurs. Policy language should reflect the exposures and meteorological realities of the Kenyan market. Direct insurance and reinsurance arrangements should be tested for alignment, and claims teams should know in advance how adjusters, engineers, forensic accountants and other specialists will be mobilised if multiple significant losses arise simultaneously.

The approaching short rains are therefore not simply a weather issue. They are an opportunity to stress test the insurance contract before the insurance contract itself is tested by a loss.

At Clyde & Co, our work on complex insurance and reinsurance matters across Kenya and the wider African market regularly brings together precisely these issues: policy wording, catastrophe exposure, claims strategy, reinsurance, and regulatory considerations. Experience suggests that relatively modest attention to these questions before an event can avoid considerably more difficult conversations afterwards.

The best time to discover an ambiguity in a flood definition, an inadequate catastrophe limit or a gap between insurance and reinsurance coverage is before the rains arrive.

For any questions or guidance, please contact any of our team below.