Presentation by R Nganga, Syngenta Foundation for Sustainable Agriculture, at the CCAFS Workshop on Institutions and Policies to Scale out Climate Smart Agriculture held between 2-5 December 2013, in Colombo, Sri Lanka.

1. PPP MODEL OF INSURANCE IN AFRICA

2. Kilimo Salama links farmers to insurance, empowering them to
invest in their farms.
Kilimo Salama is a social enterprise incubated by the
Syngenta Foundation for Sustainable Agriculture, Kenyan
Insurer UAP and co funded by the IFC managed Global Index
Insurance Facility .
Our team has developed a range of products, already
insuring over 100,000 farmers in 2013 in Kenya and Rwanda.
Contents
1.The Challenge
2.Our Solution
3.Partnerships
4.Product Portfolio
5.Sales and Distribution Channels
6.Growth and Sustainability in Outreach
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3. 1. The Challenge
A bad season affects a farmer’s livelihood.
During one bad drought season, a smallholder farmer can loose their entire harvest and lack
the money to buy quality farm inputs the next season.
A hard working, food sufficient farmer can become reliant on handouts simply because it
didn’t rain at the right time.
Traditional agricultural insurance has not been able to protect small holder farmers as it
relies on farm visits to assess losses.
Large scale farm:
$1000 Premium
- $50 Visit Costs
+ $950, insure
Small scale farm:
$10 Premium
vs. - $50 Visit Costs
- $40, can’t insure
Kilimo Salama approaches insurance from a farmer perspective
This is why we use index insurance: insurance that helps farmers cope with climate
risks and does not require farm visits.
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4. 2. Our Solution
a. We approximate farmers’ production risk using a range of data sources
b. We package insurance with credit, improved farm inputs, agronomic training,
marketing contracts through support of partners
c. We make it understandable by simplifying a complex product and the process
of acquiring insurance for farm investment.
Crops covered: Maize, Beans, Wheat, Sorghum, Coffee, Potatoes,
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5. 4. Product Portfolio
Rainfall Data + Agronomic Model
1. Weather Index - Rainfall Index and Satellite Index
2. Area yield Index
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6. 5. Sales and Distribution
1.
Retail Channel – Individual farmer purchases the
insurance from Agro-vets, sales agents, Use of Mobile
phones to register, Use of mobile money transfer to receive
compensation.
2.
Group Channel – Use of bundling approach. Credit linked
product through MFI’s, Banks, Agribusinesses
Eg OAF, Seed growers, coffee cooperatives, Replanting
guarantee
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7. 6. Growth & Sustainability in Outreach
2013 Half year shows 100,227 farmers
insured and 53% of Target Premiums
realised
2012 Expanding
to Rwanda with
20,000 farmers
after 2 seasons
2011 our first 20
contracted farmers
through an
Agribusiness
2010 our first
8,000 farmers Agcredit insurance
March 2009 Syngenta
Foundation launches the first pilot
and the project collects first 18 ksh
of premium
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8. 3. Partnerships
Our growth has relied on partnerships with organisations that can offer both small
scale and large scale farmers a package + insurance:
+
These partners fall in the following categories:
1.Agribusinesses e.g Kenya Seed Company, Syngenta, Tropical Farm Management,
SeedCo, MEA
2.Banks and Ag MFI e.g One Acre Fund, Equity Bank, and local Sacco’s
3.Mobile Network Operators e.g Safaricom, MTN
4.Government Departments: Ministry of Agriculture, Meteorology department,
5.Universities, Research institutions: KARI, CRF, ILRI, Columbia university, U.S.A
6.Insurance and Re-insurance companies: UAP, SORAS, Swiss-Re, Africa-Re, Kenya-Re
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9. 7. Key Lessons
Access barriers
Legal and Regulatory framework in different
regions. The need for non traditional approach
required
Reliable historical weather data not readily
available in all areas
Lack of strong regulated value chains and/or
farmer organization in some expansion countries
Negative perceptions to insurance from past
experiences
Restrictive in coverage of weather stations
Critical success factors
Client driven product development process
Properly identified distributional channel that
would ensure farmer access
Experimentation in training models and
marketing forums
Innovation hub made of a team from diverse
fields eg agriculture and insurance fields
(Agronomists, Actuaries, Education and
Extension, Satellite and automated weather
stations technologies)
Good partnerships with local governments and
agric custodians/stakeholders
Clip
See KS farmer experience
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10. Index Insurance works best as a package
See KS farmer experience
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