Farmers to benefit from Sh607m drought cover
Worldcover, a climate insurance provider based in New York and Africa, has raised Sh607 million to insure smallholder farmers in Kenya against the effects of drought.
The funding, set to be rolled out immediately, will also benefit small scale farmers in Uganda and Ghana. The move is expected to boost farmers’ earnings.
Drought has remained the biggest challenge facing farmers in the Sub-saharan Africa, dealing a blow to their yields and income.
“With the rise of many ‘insuretech’ startups around the world, we are excited about this successful round of Series A funding as it enables us to accelerate growth in existing markets while working towards expansion into new regions,” said Worldcover CEO and co-founder Christopher Sheehan in a statement Friday.
“This will allow us to fulfill our ultimate vision of making the world more resilient to climate change.”
Founded in 2015 and launched as a fintech marketplace for climate insurance, Worldcover is addressing between $50 and $100 billion in annual losses from natural disasters, of which less than 1 per cent is insured.
The uninsured 99 per cent are concentrated in emerging markets with the risk spread among millions of small businesses, particularly farmers. These farmers are often in remote areas and do not have access to cost-effective insurance products protecting them against the devastating
In February, Worldcover made payouts to farmers in Kenya due to short-season yields falling 70 per cent below the long-term average
loss of income due to climatic conditions.
In February, Worldcover made payouts to farmers in Kenya due to short-season yields falling 70 per cent below the long-term average in the south eastern region of the country.
This resulted in a high claim rate, with nearly three in four farmers on the platform successfully receiving a claim using Worldcover’s mobile unstructured supplementary service data (USSD) platform.
“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.
Worldcover’s platform uses satellite imagery, on-ground sensors, mobile phones and data analytics to create insurance options for farmers whose crop yields are affected adversely by weather events, primarily lack of rain.
Farmers connect to Worldcover by creating an account on its USSD mobile app.
From there they can input their region and crop type and determine how much insurance they would like to buy and use mobile money to purchase a plan.
Worldcover works with payments providers such as M-pesa in Kenya and MTN Mobile Money in Ghana.
The service works on a sliding scale, where a customer can receive anywhere from 5 times to 15 times the amount of premium they have paid.
Farmers expect to increase their income after taking drought insurance.file