Kilimo Salama, Experiences from Kenya FARM - Pluriagri ... Primary insurer Kilimo Salama/SFSA ¢â‚¬¢ Pilot

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  • Kilimo Salama, Experiences from Kenya FARM - Pluriagri conference - 18 dec 2012 Rose Goslinga, Syngenta Foundation

  • Comment ça va?

    Ca va bien !

    Habari ? Mvua ameHabari ? Mvua ame fika

    Mvua bado kufika

  • The mandate of Kilimo Salama

    “Develop and implement agricultural insurance products

    for smallholder farmers”

    3

  • Traditional Insurance

    Large scale farm: US$ 1000 Premium

    - US$ 50 Visit Costs + US$950, insure

    Small scale farm: US$ 10 Premium

    - US$ 50 Visit Costs - US$ 40, can’t insure

  • We don’t visit the farm

    Weather station, district yield data or satellite data

    + agronomic formula’s to agronomic formula’s to model required rainfall

  • Product Development

    Areas in which we’ve learnt a lot….

    Distribution & Customer

    Service Data

  • Rainfall requirements for a good yield

  • Area Yield Products Use District Data

    807,8

    686,63

    600

    800

    1 000

    Karongi Beans and 5 year average

    Karongi

    403,9

    -200

    0

    200

    400

    2007 B 2008 B 2009 B 2010 B 2011 B

    M T

    /H a Karongi 5 year average

    Karongi Percentage Difference

    Payout threshold

    Payout Max

  • Western Kenya 2012

    6,700 farmers received seed and fertilizer in April 2012

    25 m

    m 24 days with no rain….

    54% loss of sum insured 300,000 USD loss

    =

    April 2012

  • Western Kenya August 2012

    Early Compensation is now a standard option

  • Combinations of Products

    807,8

    686,63

    403,9 400

    600

    800

    1 000 Area yield Weather index

    +

    -200

    0

    200

    2007 B 2008 B 2009 B 2010 B 2011 B

    Best of both worlds: - Cover for disease and flood risk through area yield index - Fast outcome of weather index products - Micro climates covered through weather index

    +

  • We tried a variety of distribution channels

  • Distribution is key: 4 years of evidence

    8 ,0

    0 0

    N r

    o f

    Fa rm

    e rs

    5 ,0

    0 0

    1 9

    ,0 0

    0

    7 ,0

    0 0

    6 5

    ,0 0

    0

    Total Nr of Farmers

    - Individuals: +7000

    - Groups: 65,000

    Premium:

    - Individuals: 2mln Ksh

    - Groups: 40mln Ksh

    Premium rates:

    - Individuals: 5%

    (sponsored)

    20102009

    1 8

    5

    2 ,0

    0 0

    2011

    5 ,0

    0 0

    2012

    Individual sales grows, but groups sales was off the charts.

    (sponsored)

    - Groups: 5.6%

    Average farm size:

    - Individuals: 1-2 ac

    - Groups: 0.5-1 ac

    Gender:

    - Individuals: 65% M

    - Groups: 60% F

  • Challenges with aggregators….

    • Delay in releasing loan results in yield losses

    • Farmers default when • Farmers default when they know that there is insurance

    • Banks focus: we want our credit repaid

  • Successful aggregators….

    Are interested in the harvest Buy the harvest

    Improve farmers incomes

    Input + Agri Training on loan

    Input + Agri Training on loan

    Weather index Insurance

    Weather index Insurance

    Distributed to groups of farmers

    Distributed to groups of farmers

  • Servicing your customer….

    Improved Retention

    Increased Sum Insured

    Less Basis Risk

  • Data…. Historicals are available

  • Implementation structure

    SORAS/ UAP

    Primary insurer Kilimo Salama/SFSA

    • Pilot development, • Data collection, • Pricing • Training local partners • Weather station

    Swiss Re/ Africa Re

    Product development,

    reinsurer

    Ministry of Agriculture

    • Yield data collection, reporting and certification

    1818

    • Weather station management

    certification

    • Weather station regulation

    Client Organisation

    • Insured on behalf of farmers • Pays premium • Informs farmers • Assess losses • Disburses compensation

    Farmers accessing services including insurance

  • A great team

  • www.kilimosalama.com

    Rose@kilimosalama.com