Tech firm provides affordable insurance for small-scale farmers

Smallholder farmers who have no access to affordable insurance covers for their crops and livestock incur hefty losses as weather becomes increasingly unpredictable.

However, this dire situation is gradually changing as tech start-ups provide affordable insurance covers.

Christopher Sheehan, CEO and co-founder of World Cover, insuretech startup provides satellite-enabled climate insurance to smallholder farmers, says technology-enabled insurance cover remains crucial in building smallholder farmers’ resilience across the world.

The insurance provider which is rolling out its services in Ghana, Uganda, and Kenya is leveraging on newly available technologies to create an easy-to-use and affordable insurance policy.

Globally, smallholder farmers lose between $50 billion and $100 billion annually from natural disasters, yet many of them go without compensation as less than 1% of them is insured.

Many of these farmers are often in remote areas where they do not have access to cost-effective insurance products to protect them against the climate change instigated losses.

In February 2019, WorldCover made payouts to farmers in Kenya following massive crop failures attributed to poor rainfall distribution across the country.

The company was founded in 2015 as a fintech marketplace for climate insurance.

“WorldCover has uniquely combined technological advances and developed a solution that allows us to support smallholder farmers caught in conditions that are worsening due to climate change,"Mr Sheehan said.

The company’s platform has data on weather and crop yield from satellites and remote stations with infroming from its rapidly growing network of farmers.

Though the use of simple customised policies which rely on mobile phones and digital money, instant payouts via mobile money platforms are possible thus effectively eliminating fraud.

“Our algorithms are specifically calibrated to rainfall events by region and crop type, automatically triggering instant payouts to insured farmers through mobile money services like M-Pesa,” said Jason Schapiro, WorldCover Lead Engineer.

The technology eliminates the need for time-consuming loss assessment and other traditional insurance practices that are incompatible with serving remote farmers in emerging markets,Mr Schapiro explained.