Affordable crop insurance for smallholder farmers
ICS, Agrics, Dutch insurance company Achmea, reinsurer Swiss Re, satellite data expert EARS and Kenyan insurance company UAP join forces to develop an accessible and affordable insurance product for smallholder farmers. By making use of the newest technologies, like blockchain, remote sensing and mobile payment, the partners aim to minimize the costs of an insurance product to make it affordable for farmers. The testing phase of the product is scheduled for the long rains season 2018 in Kenya, which takes place from February – May.
The insurance context
In recent years, several agricultural microinsurance products have been developed to provide an alternative for smallholders to whom traditional agricultural insurance products are unavailable. However, except for some highly subsidised products in India, none of them has reached scale. The main reasons for this are lack of knowledge and the difficulty for insurance companies to reach smallholder farmers, limitations on scope or cover, and premiums that are too high for the smallholders to afford.
By creating a fully automated product that takes away the inefficiencies in the value chain (all the way from farmer to the reinsurance company) we aim to create a truly affordable insurance product. At the same time, we will also tackle the other causes of the low insurance uptake of smallholders, and add accessibility and understandability to the equation.
Over the coming months both the technology solution and the insurance solutions will be tested and further developed.