MR Microinsurance_2012_03_29.indd - International Labour ...

534 Infrastructure and environment for microinsurance
Th e fourth arrangement uses a mobile wallet or mobile money platform to
facilitate premium payments via mobile phones. A mobile money platform, like
M-PESA in Kenya (see Box 24.4), leapfrogs traditional banking and money transfer
technology, and is particularly relevant in regions with little or no infrastructure
where the population is largely unbanked. For insurance, it provides a convenient
mechanism for premium collection, as illustrated by Syngenta Foundation’s
Kilimo Salama weather-index insurance product in Kenya (Box 24.3).
Box 24.3 Role of technology in sales and premium collection: Th e case of Kilimo Salama
Th e experience of Kilimo Salama clearly illustrates how technology can be used
for diff erent functions in making a microinsurance product viable. Kilimo
Salama is an index-based agriculture insurance product that was piloted in
March 2009, initially covering only 200 maize farmers and drawing on data col- col-
lected by two weather stations. Th e project has since grown and now uses 30
weather stations and covers 22 000 farmers who grow maize, sorghum, cotton,
beans and coff ee.
Kilimo Salama (which means “Safe Agriculture” in Kiswahili) is a partnership
between the Syngenta Foundation, Safaricom, the largest mobile network opera-
tor in Kenya, and UAP, a large general insurance company. Th e product covers
farmers’ agricultural inputs (e.g. fertilizer, seed and pesticides) in the event of
drought or excessive rainfall. Th e product is index-based, meaning that payouts
are triggered by rainfall amounts. During the planting season, actual rainfall is
measured using a solar-powered weather station in each area. If rainfall is below
or above predetermined thresholds, a payout is made. Th e value of the payout is
a function of how much the recorded rainfall deviates from the threshold.
Kilimo Kilimo Salama is sold sold through two channels: channels: key accounts and retailers. retailers. For For
key accounts, the product is sold through corporate entities, including seed companies,
cotton millers, banks and microfi nance institutions, which have an inter-
est in the insurability of agriculture yields and/or inputs. Th rough the retail
channel, the product is sold on a voluntary basis through 110 agro-dealerships,
which rely on technology to support the enrolment and premium collection
process.
Th e administrative backbone of Kilimo Salama is a fully automated, paperless paperless
technology developed by the Syngenta Foundation, which uses mobile phones
with tailor-made Java software as registration devices at the points of sale. Th e
mobile phones transmit customer information to a central server using GPRS
technology. Th e server in turn communicates with the insured farmer via SMS.
Th e “backbone” technology is linked to Safaricom’s M-PESA mobile payments
platform to facilitate payment of premiums and settlement of claims.