Agriculture insurance is increasingly becoming an essential tool for farmers in Kenya, offering a safety net against unpredictable weather conditions and other risks. The journey to establish such insurance, however, has not been without challenges. In 2014, Agriculture Climate Risk Enterprise (ACRE) Africa entered the field with the goal of protecting farmers from climate-related risks, but convincing farmers to embrace insurance was not an easy task. Initially, many farmers were skeptical about the benefits of insurance, often due to a lack of understanding about how it worked.
Ewan Wheeler, the CEO of ACRE Africa, recalls how difficult it was to sell insurance directly to farmers. To overcome this, the company decided to bundle insurance with other services such as seed replacement and loan repayment. This approach proved successful, as it added tangible value to the insurance product, making it more attractive to farmers. Today, ACRE Africa insures over 5 million farmers, with nearly 1 million new farmers joining the program every year. The company has successfully utilized technology and innovation to reach smallholder farmers, a group that is often hard to access through traditional insurance channels.
One of the key innovations that ACRE Africa has introduced is AI-powered, picture-based insurance. This allows farmers to take photos of their crops to receive advice or to quantify losses, streamlining the claims process. This technology has made insurance more efficient and accessible, particularly for farmers in remote areas. Additionally, the company relies on a network of agents known as “village champions.” These individuals are trained to educate farmers about insurance and provide crucial services such as linking them to credit, inputs, markets, and advisory services. The village champions play a critical role in creating awareness and building trust among farmers, helping them understand the importance of insurance and financial inclusion.
Wycliffe Mwake, a farmer from Makueni, shared his personal experience with agricultural insurance. Living in a semi-arid region, Mwake had frequently lost crops due to droughts. When insurance became available, he was one of the first to adopt it, recognizing that it would help him recover from crop losses caused by both droughts and floods. Since adopting the insurance in 2018, Mwake has become a leader of a group of 250 farmers, with 130 of them enrolled in the program. Despite the challenges of convincing other farmers, Mwake has observed a growing understanding of the value of insurance, though he emphasizes the need for more training and sensitization to help farmers fully appreciate the benefits.
Eileen Bureza from the Ministry of Agriculture and Livestock highlighted the importance of collaboration to create a stable foundation for agricultural insurance in Kenya. While the sector remains unregulated, Bureza stressed that strong partnerships are essential for the long-term success of agricultural insurance. She noted that while the unregulated nature of the sector presents both opportunities and risks, it also provides the flexibility to build the insurance system more effectively. Strengthening the foundation of agricultural insurance is crucial to ensure its sustainability and success.
Bureza also suggested that the synergy between government programs and ACRE Africa’s village champions could further expand the reach of agricultural insurance. Training government agri-preneurs using the village champions’ approach could create a larger network of individuals who could help spread the insurance message to farmers across the country. This collaboration could significantly enhance the effectiveness of agricultural insurance programs.
Farid Wangara, Principal Officer at ACRE Africa, emphasized the importance of insurance in mitigating climate-related risks. He explained that climate change is a real threat to agriculture, and the best way to protect agricultural investments is through insurance. With insurance, farmers are compensated if anything happens to their crops, providing them with a financial safety net in the face of unpredictable weather patterns. Initially, many farmers didn’t fully understand agricultural insurance, but with the development of innovative distribution models, more farmers are now aware of the risks associated with farming and the role insurance plays in managing those risks.
Anne Chelagat, CEO of the Insurance Regulatory Authority (IRA), praised ACRE Africa for its role in advancing insurance solutions in Kenya’s agricultural sector. She noted that technology plays a crucial role in simplifying the insurance process, making it easier for farmers to access coverage. Innovations such as AI-powered claims verification have streamlined the process, making it more efficient and accurate. Chelagat also emphasized the importance of connecting stakeholders within the insurance value chain to reliable risk mitigation solutions, which are vital for ensuring the country’s food security and income stability.
In conclusion, the growth of agricultural insurance in Kenya, driven by innovations in technology and the efforts of organizations like ACRE Africa, has the potential to transform the agricultural sector. By providing farmers with the tools to manage climate-related risks, insurance can help build resilience and ensure the long-term stability of the farming community. However, continued collaboration, education, and regulatory support are essential to sustain and expand these efforts.
