Picture-based weather insurance for Kenya’s smallholder farmers

A woman stands among her crops.
ACRE Africa

Extreme weather events such as droughts, floods, and heatwaves are threatening the livelihoods of millions of smallholder farmers across Africa — and they are projected to increase due to climate change. Despite this situation, weather insurance schemes to protect farmers against crop losses have seen only limited success because of the high monitoring and verification costs for traditional insurance companies. Index-based weather insurance, a relatively new tool for farmers that pays out based on a measurable index, such as rainfall, is often poorly correlated with farmers’ actual yield losses. The discrepancy (known as basis risk) occurs because verifying crop losses is not required as per traditional insurance schemes.

This project is developing an innovative, climate-smart insurance product that combines satellite and smartphone imagery to assess actual crop yield losses and monitor management practices. Ground pictures taken by farmers help reduce monitoring costs and minimize basis risks. The project combines this insurance package with information and climate resilient technologies to understand how to adapt insurance premiums to the technology preferences of farmers.

Emerging outcomes

Partnering with key stakeholders

The research team partnered with key stakeholders, including agricultural ministries and policymakers, in the Kenyan counties of Meru, Embu, and Tharaka Nithi. Insurance value chain stakeholders, including representatives of farmer groups, seed producers, and microfinance institutions, have also been engaged to ensure the sustainability of research findings beyond the scope of the project.   

To help promote uptake of the innovative insurance approach and to increase farmer resilience, the project has partnered with four seed companies (SeedCo Kenya, Kenya Seed, Advanta, and Dryland Seed Kenya) to provide drought-tolerant seed to farmers. The Kenya Plant Health Inspectorate is also partnering with the project to provide agriculture extension advice. Safaricom Kenya Limited will provide the telecommunication infrastructure, including phones and data bundles, for farmers and all other stakeholders.

Farmer profiling

In the three project counties, 54 champion farmers have been engaged and trained to use details from an app on their smartphone (provided by the project) to explain and promote the insurance to other smallholders and encourage them to register with the scheme. Each champion farmer was tasked with listing 150 farmers in their area. A total of 8,100 farming households that meet the research criteria (which includes sex disaggregated data on production management, access to seeds and smartphones, and knowledge of previous and future crop production activities) have been registered.  

Of the 8,100 registered households, 32% are headed by women. The profiling revealed that only 18% of the registered women farmers have access to a smartphone, whilst the remaining majority use feature phones. In contrast, 28% of the registered male farmers use a smartphone. The registered farmers without smartphones will be able to access the insurance information using the smartphones of the champion farmers. 

Piloting picture-based insurance

The project developed a picture-based insurance pilot app for android phones, called SeeItGrow, that reliably and rapidly predicts weather-related yield losses at a low cost. The interface and content of the tool have been set up and installed on the champion farmers’ smartphones. SeeItGrow is also available on Google Play store for direct download. Pricing for the short rainy season has been set at 6% of the farmers’ seed costs (approximately CA$2.65) in order to receive a pay out of up to CA$23 for their seeds per hectare of land. The product has been placed with a local insurer called APA Kenya and with Africa-Re, a reinsuring company that provides financial protection to insurance companies.

The pilot phase saw an uptake of 2,160 insurance policies (out of the 8,100 farming households registered). The project has since scaled out to Bungoma and Busia in western Kenya and Machakos and Makueni in eastern Kenya and is now working with 120 champions. The number of registered farmers has also increased to 18,000.