Agriculture insurance takes root with tech

In 2014, Agriculture Climate Risk Enterprise (ACRE) Africa entered the world of farming insurance, to cushion farmers from unforeseen risks such as unpredictable weather conditions. As it turned out, it was not a walk in the park.

Ewan Wheeler, CEO of ACRE Africa recounts the initial struggle of making farmers understand and embrace insurance. They resolved to focus on educating farmers about the importance of insurance while also bundling it with other goodies.

“It's difficult to sell insurance on its own to a farmer. So we bundle insurance with other services like seed replacement and loan repayment. This approach, alongside other strategies have worked well,” he says.

Today, ACRE Africa has insured more than 5million farmers and counting, with nearly 1 million farmers joining every year. Wheeler spoke during ACRE Africa’s 10th Anniversary, themed ‘Building Farmer Resilience,’ in Nairobi. He highlighted the role of innovation and technology in reaching smallholder farmers.

The CEO explains, “We use Artificial Intelligence (AI)-powered picture based insurance, allowing farmers to take photos for advice or quantifying losses, thereby making the process more efficient.

Stella Kimani, the Chief Operations Officer at ACRE Africa says the firm relies on the network of agents, known as village champions who are trained to educate farmers about insurance.

“Village champions act as last mile distribution agents, as they are the people directly in touch with the farmers. They create awareness and sensitization about agricultural insurance and financial inclusion. Also link farmers to credit, inputs, markets and adversary services,” she says.

One such champion, Wycliffe Mwake, farmer from Makueni shared his story of how agriculture insurance has helped him recover from droughts and floods.

“Living in a semi-arid area, l would lose crops to droughts many times. So, when the insurance became available, l was among the first to adopt it, knowing, it would assist recover when l lose crop to the recurring drought and sometimes, floods,” he explains.

Mwake who adopted the insurance in 2018, now leads a group of 250 farmers, 130 of who have enrolled in the program.

Despite the challenges of convincing farmers, he has noted the growing understanding of the insurance’s value and emphasizes the need for more training and sensitization to help farmers fully appreciate insurance benefits.

Eileen Bureza from the Ministry of Agriculture and Livestock called for more collaboration to build a stable foundation for agriculture insurance in Kenya. While the sector is currently unregulated, Bureza stressed the importance of strong partnerships to ensure its long term success.

“In such an open space, there is a danger and there is a beauty. Because it gives you the permission to now take advantage of the existing condition to build up. If you build quickly on a weak foundation, you risk failure. But, if we take time to strengthen the foundation first, we can build more sustainably,” she said.

Bureza highlights the synergy between government programs and ACRE Africa’s village champions, suggesting that training government agri-preneurs could significantly increase the reach of insurance services.

She suggests, “If village champions can reach more farmers and at the Ministry we have agri-preneurs working in every ward, then we could train agri-preneurs using the village champions’ approach, creating a larger network of people who can spread the insurance message to farmers.”

Bureza disclosed that agriculture insurance has historically lacked its own class, due to limited outreach to small scale farmers. However, she noted that this is now changing, “A bird whispered that that class has been created. We are very grateful for this progress.”

Farid Wangara, Principal Officer for ACRE Africa reflected on the company’s growth and the importance of insurance in mitigating climate-related risks.

“Climate change is a real threat and the best way to protect agricultural investments is through agriculture insurance. If anything happens to crops, farmers will receive compensation-that’s the beauty of agriculture insurance,” Wangara explains.

He says, initially, farmers didn’t fully understand agriculture insurance. But, they have developed designs and distribution models that reach farmers even in the villages, through the ‘village champions’ model. Now farmers are more aware of the risks associated with agriculture.

Anne Chelagat, CEO of Insurance Regulatory Authority (IRA) praised ACRE Africa for its role in advancing insurance solutions in Kenya’s agriculture sector. She stressed the importance of technology in simplifying insurance processes and improving accessibility for farmers.

“Through innovations, we leverage technology to simplify the distribution of insurance products, making it easier for farmers to access coverage. Complex insurance processes such as claims verification have become seamless and accurate,” Chelagat says.

She explains, ACRE Africa’s role in connecting stakeholders within the insurance value chain to reliable risk mitigation solutions is not just a priority, but essential for the country’s food security and income stability.