LISTEN NOW: Agricultural Insurance: How can Digitisation Lead to Scale?


Author: Sarah Corley

Bundling and partnership-based approaches have enabled agricultural insurance services to grow. This has improved smallholder farmers’ climate resilience and provided them with a safety net against crop losses. However, poor weather data availability, inadequate government support and distribution difficulties remain barriers to scale. This webinar, run in partnership with GSMA, explored how mobile technology and different business model approaches have driven the adoption of agricultural insurance services.


There were four key discussion areas in the webinar:

1.How has digitisation change the agriculture index insurance landscape over the last decade? Richard described how digitisation had facilitated a move from analogue weather stations and their challenges to satellite imagery. Rose described the shift within Pula moving from weather to yield index. Weather index insurance required a complex algorithm and was difficult to explain to farmers, but yield index is more intuitive. The higher quality weather data and digitalised yield data helps to improve algorithms and reduce risk for the insurer. It also helped with getting the product to the customer via digital channels such as mobile phones.

2.Why has index insurance not seen the same type of growth as life or hospi-cash insurance? Simon expressed that it is not lack of demand and the need is strong, but conceptually agri insurance is difficult to grasp. Customers of health/life insurance are mainly urban and educated but customer churn is high. He hopes for a healthier growth in agri insurance with good retention rates. Richard reminds that insurance is a hard sell and people are not prepared/able to pay the premium. Governments/donors often subsidise the product and farmers don’t purchase when faced with the full cost themselves. A

3.How can mobile technology be deployed to grow index insurance services further? Rose decribed their partnership with Safaricom in Kenya which works well as they have a huge customer base and insurance is included with their agri-loan products – it works due to the reach and trust in M-PESA. Simon partners with Orange in Mali and their insurance products are available via the USSD menu giving it visability and accessibility to their large customer base. Mobile networks are powerful and trusted brands and make good partners. Mobile networks could help more through sharing GPS data to pinpoint customer location for onboarding and sharing their weather data.

4.What type of business model approach is likely to lead to sustain medium to long-term growth? Pula bow takes a B2B approach as that is how they can make the economics work and get to scale, but warns the margins are always this. OKO has a B2C model and attract customers due to the reach of the MNO and plans to achieve scale through accessibility and last mile delivery. You need a distribution channel with good reach and can collect fees.

The webinar featured the following panelists: