Index-based agricultural insurance strengthens resilience of smallholder farmers

As agriculture in Africa is increasingly affected by climate change (droughts, floods, etc.), a new type of insurance, known as index insurance, has been developed to protect smallholder farmers from significant financial losses. Unlike traditional agricultural insurance, under which compensation is based on the observation of damage, index insurance is based on climatic indicators. As a result, the assessment process is less costly and compensation is paid sooner than with traditional insurance.

In this context, ADA supported OKO, an insurtech in Mali that provides index-based agricultural insurance to smallholder maize producers via mobile phone to strengthen their resilience and to improve their food security in line with the Sustainable Development Goals. The support provided by ADA enabled OKO to expand its distribution network, set up a local server and conduct a survey of customers who had taken out OKO insurance.

Among the survey findings, many small-scale agricultural producers in Mali said they have been insured for the first time.

“I work better and with peace of mind because I know I am protected.”

Find out the other survey findings and the lessons learned for the inclusive insurance sector.