Farm­ers to ben­e­fit from Sh607m drought cover

Business Daily (Kenya) - - MARKET PLACE - Bon­face Otieno bo­[email protected]­tion­

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

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.