Agricultural Insurance for Smallholder Farmers

Globally, less than 20 percent of smallholder farmers have insurance. Low awareness of insurance, the high cost of premiums and long claim settlement processes have restricted farmer uptake of indemnity-based insurance services. Index insurance offers ways of overcoming some of these challenges. However, service providers face difficulties such as poor historical and current weather data availability, inadequate government support to provide certain index insurance services and effective distribution. 

This report looks at how mobile network operators can use their assets to drive the adoption of index insurance services in developing countries. For instance, mobile technology can be used to register and locate farmers, mobile money can be used to collect premiums and pay out claims, and commercial microwave link data from mobile networks can be used to monitor rainfall. The report analyzes the challenges service providers face in scaling index insurance and the potential opportunities for growth through partnership-based approaches.