How to Make Agri Insurance More Affordable and Accessible to Farmers

Unlocking Growth and Sustainability in a Changing Climate

The agricultural sector is the backbone of global food security, yet farmers face a multitude of risks, from unpredictable weather patterns and volatile commodity prices to natural disasters and pests. These risks can devastate livelihoods and hinder agricultural development, particularly in developing countries.

Traditionally, agricultural insurance has been limited in reach and affordability for smallholder farmers, who often lack access to financial services and formal documentation. This creates a protection gap, leaving millions of farmers vulnerable to financial hardship in the face of adversity.

However, the tide is turning.?

Insurtech startups and established insurance players are increasingly recognizing the immense potential of the agri-insurance market and are developing innovative solutions to bridge the protection gap. Here, we explore some key initiatives being undertaken in different countries to make agri-insurance more affordable and accessible to farmers:

1. Subsidized Premiums and Public-Private Partnerships:

• India: The Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme, launched by the Indian government in 2016, provides subsidized crop insurance to millions of farmers. The scheme has been successful in increasing insurance penetration and reducing the financial burden on farmers.
• Kenya: The Kenya Livestock Insurance Program (KLIP) is a public-private partnership that provides subsidized livestock insurance to pastoralists. The program has helped to reduce livestock losses and improve the livelihoods of pastoral communities.

2. Microinsurance and Mobile Technology:

• China: Microinsurance products tailored to the specific needs of smallholder farmers are gaining traction in China. These products offer affordable coverage for a range of risks, from hail damage to livestock diseases.
• Ghana: The Esoko platform in Ghana leverages mobile technology to provide farmers with access to weather information, market prices, and agricultural insurance. This approach has made it easier and more convenient for farmers to obtain insurance coverage.

3. Index-Based Insurance and Big Data:

• Ethiopia: The Rainfall Index-Based Insurance (RBI) program in Ethiopia provides payouts to farmers based on rainfall levels, rather than actual crop losses. This eliminates the need for costly claims verification and makes the insurance process more efficient.
• India: Reliance General Insurance is using big data analytics to develop weather-based crop insurance products that are better tailored to the specific risks faced by farmers in different regions.

Lexasure: A Leader in Agri-Insurance Innovation

Lexasure is at the forefront of agri-insurance innovation, committed to developing and delivering affordable and accessible insurance solutions to farmers across South and Southeast Asia while leveraging digital platforms to make it easier for farmers to access and manage their insurance policies.?

By working together, insurers, governments, and technology providers can play a critical role in making agri-insurance more affordable and accessible to farmers around the world.