Kilimo Salama, Experiences from KenyaFARM - Pluriagri conference - 18 dec 2012Rose Goslinga, Syngenta Foundation

Comment ça va?

Ca va bien !

Habari ? Mvua ameHabari ? Mvua amefika

Mvua badokufika

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

ServiceData

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

MT

/Ha 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 insured300,000 USD loss

=

April 2012

Western Kenya August 2012

Early Compensation is now a standard option

Combinations of Products

807,8

686,63

403,9400

600

800

1 000Area 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

00

Nr

of

Farm

ers

5,0

00

19

,00

0

7,0

00

65

,00

0

Total Nr of Farmers

- Individuals: +7000

- Groups: 65,000

Premium:

- Individuals: 2mln Ksh

- Groups: 40mln Ksh

Premium rates:

- Individuals: 5%

(sponsored)

20102009

18

5

2,0

00

2011

5,0

00

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 harvestBuy 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