Growing agri insurance: ACRE Africa’s experience of innovative partnerships

Globally, less than 20 per cent of smallholder farmers have crop insurance. Low awareness of insurance, the high cost of premiums, farm-level loss assessments and long claim settlement processes have restricted farmer uptake of indemnity-based insurance services. Index insurance offers ways of overcoming some of these challenges. However, service providers face difficulties such as poor weather data availability, inadequate government support to provide certain index insurance services and ineffective distribution channels.

Our latest report on agricultural insurance explores how mobile technology, partnerships with organisations trusted by farmers and bundling with value-added services can tackle these problems and drive scale. ACRE Africa is an index insurance service provider based in Kenya, covering around 1.7 million smallholder farmers across East Africa. We spoke to Patrick Sampao, ACRE Africa’s Digital Product Manager, to find out more about the importance of partnerships and how the company has changed its approach during the COVID-19 pandemic. Read on to find out what they had to say:

Who are your major partners and how have these partnerships helped ACRE Africa reach farmers?

“Partnerships are important in distributing agricultural insurance amongst remotely located farmers. Our mobile-based weather index insurance product, Bima Pima, is sold through scratch cards that have a unique code. Farmers can register this code and their details via USSD. We have partnered with agro-dealers as distribution points, where farmers can buy insurance scratch cards together with inputs.

We also distribute our insurance product to farmers through partnerships with financial institutions, agribusinesses and mobile network operators (MNOs). For example, mobile money-based loans advanced to farmers by Safaricom through its Digifarm platform are insured by ACRE Africa and Pula. ACRE Africa also bundles Bima Pima with seeds sold via Farmers Pride, a digital marketplace for farmers and agro-dealers.”

How else have you benefited from these diverse partnerships?

“One of the biggest challenges that has hindered the uptake of microinsurance, including agricultural insurance, is trust. Partnerships with trusted institutions, such as banks and MNOs, have helped to bypass this hurdle. For instance, our partnership with Safaricom has enabled our mass market product to leverage Safaricom’s strong brand and earn farmers’ trust in using our mobile money-based platform for premium collection.

Safaricom’s mobile network coverage, coupled with M-Pesa’s expansive mobile money agent network, has also been beneficial in helping to get our product to the last mile. In addition, we have also benefited from a very stable USSD platform for farmer activation and data collection.”

What impact have COVID-19 restrictions had on your ability to deliver insurance to smallholder farmers?

“We currently rely on an agent network spread across Kenya to distribute our products and provide farmer education. Agricultural insurance requires intensive farmer training to grow uptake. The agents often rely on training farmers in groups, which has been affected by the government’s ban on meetings and restriction on movements.

In terms of distribution, we have been unable to get our scratch cards out to farmers quickly enough. We faced a significant problem in not being able to distribute 150,000 scratch cards to 300 agents, and risked missing out on our target of registering 50,000 farmers for this season.”

How have you been overcoming challenges in rural access arising from the government-imposed ban on meetings and restriction on movements?

“To maintain rural access, we developed new partnerships to facilitate distribution and customised our engagements to suit partners’ operations. For example, county governments have aggregated farmers into groups or unions. We have partnered with a number of counties and farmer co-operatives to source their farmer group data (phone number, value chain and acreage). This has enabled us to contact and activate farmers remotely through bulk SMS and USSD.

Having commoditised insurance into scratch cards sold to farmers, we had to consider an alternative distribution approach. We redesigned our platform to accommodate e-tokens or vouchers that farmers can activate remotely via USSD. This has enabled us to onboard 34,000 farmers since the season began in March – all without any agent interaction.

To continue providing farmer training, we set up a multilingual outbound call centre to train farmers remotely. This involves instructions on how to activate their insurance cover via USSD. We also have a multilingual inbound call centre to respond to farmer queries on any challenges with our platform. This number is shared via the initial bulk SMS to farmers.”

COVID-19 came about at the same time as the locust infestation in East Africa. What other services are farmers looking for from agricultural insurance providers?

“Farmers are looking to insure other aspects of their lives. For instance, burials are a costly affair in rural Kenya; the loss of a family member of a farming household can eat into resources intended for inputs or other farming activities. To overcome this challenge, we have partnered with various farmer-based institutions to design and offer last expense, hospi-cash insurance cover bundled with a crop insurance cover. Hospi-cash insurance provides compensation if a farmer is incapacitated due to hospitalisation. This is typically offered as a bundled service in malaria-prone parts of the country.”

What are ACRE Africa’s future plans to continue scaling your services?

“To cater to market needs, we have adopted an integrated risk approach. Farmers are exposed to various risks at each level of their farming activities. As a result, we are looking to provide an end-to-end, closed loop risk mitigation solution to farmers. This can be done by onboarding partners that can close existing gaps in accessing quality inputs, extension services and markets.

We understand the importance of quality inputs, agronomic advisory and access to market in improving yields and returns for farmers. With increased incomes, farmers are more likely to invest further in their farming activities and consider insurance as a means of protecting their investments and livelihoods. For instance, we are seeing increasing demand for crop insurance amongst farmers in horticulture. These are mostly farmers who have recently transformed their enterprise from subsistence-based to profitable agribusiness.”


Find out more about index insurance services for smallholder farmers in the latest GSMA AgriTech report – Agricultural insurance for smallholder farmers: Digital innovations for scale.

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