The World Bank Group, through the Global Index Insurance Facility (GIIF), helps smallholder farmers and micro-entrepreneurs gain better access to finance, manage financial losses, and protect their livelihoods against more frequent and more severe weather events. With an objective to develop effective and sustainable markets for agriculture insurance, GIIF, since 2009, has facilitated more than 4.6 million contracts, covering over 23 million beneficiaries and $730 million in agricultural investments insured in more than 30 developing countries.
However, the potential of agriculture and index-based insurance is greatly restricted by many challenges faced throughout the product lifecycle – from product design to client delivery to claim processing:
- Product design: to design and price reliable insurance products, historic time series data of production, yield, production loss, meteorological, etc. is crucial. However, in many developing countries data availability, data quality, and challenges related to data affect the quality of design and the cost of development of the insurance product.
- Sales and distribution: at this stage, the main challenge is the low level of financial education and awareness on insurance among smallholders farmers. Insurance products remain largely ‘intangible/invisible’ to agriculture producers, as they provide a financial promise for the future and the benefit is only seen once an adverse event occurs. The distribution challenge is related to reaching the right targeted clients due to geography and inefficiency of distribution agencies.
- Premium collection: this stage faces the challenges of purchasing power of smallholder farmers but also the systems and mechanisms in place to facilitate the payment.
- Servicing/distribution: In the traditional business model, insurance companies relies on bricks-and-mortar branches, broker network and financial institutions to collect premiums and claim pay-outs. This business model limits insurance companies’ ability to reach agricultural stakeholders. Indeed, financial institutions as well insurance companies/brokers have limited branches in rural areas contributing to a difficult, high cost environment to serve the agricultural clientele. Despite almost two decades of efforts, microinsurance reaches just under 300 million people across the developing world. This is only around 10% of the potential market for insurance.
- Claim processing: the challenge at this stage is the systems and mechanisms in place to facilitate pay-outs to the clients, given the level of account ownerships among smallholders.
Insuretech, at the intersection of insurance and technology, holds the potential to overcome those challenges and transform the insurance landscape. Integrating Insuretech innovations with agriculture insurance promises to enhance product design, improve sales and distribution, facilitate premium collection, and optimize servicing and claims processing.
ABOUT THE CHALLENGE:
To leverage innovative solutions, GIIF is organizing an agriculture Insuretech innovation challenge/competition as a part of an Insuretech fair, to be hosted in Mumbai, India in June 2019. Through this innovation fair, the GIIF aims at improving the understanding of Insuretech, supporting the integration of different technology solutions with agriculture insurance, and applying innovation with actual programs on the ground.
WHO CAN APPLY:
Technology-led enterprises in South and East Asia across different stages of maturity (prototype, pilot, growth), offering solutions to the challenges faced in the development of agriculture insurance and index insurance. If you are working on technology solutions that can help the development of agriculture insurance and index insurance, this challenge/competition is for you and we would like to know more about your innovation. Even if you have not yet focused on applying your innovation to facilitating uptake of insurance for the agriculture sector, but see an opportunity of tailoring your solution/innovation to do so, you can still apply.
Applicants can apply under three thematic areas which the application template will mention:
- Thematic area 1: Data & Analytics – Enterprises that
- Support data collection and crop loss assessment for product design.
- Capture crop production evolution, agri technological modules/charts, relation between weather and IPM, agricultural practices.
- Improve data collection regarding crop yield and weather, and/or help forecast early financing.
- Use latest generation remote-sensing and imagery products to collect data for product design and pricing.
- Thematic area 2: Sales and Distribution – Enterprises that:
- Reach/distribute insurance products to farmers with low access to network/internet connectivity
- mprove farmers and insurance aggregators risk reserve modules to improve understanding and decision making on smart risk taking.
- Increase market access (Ex: P2P solutions)
- Reach scattered smallholders in cost-efficient manner
- Thematic area 3: Premiums & Claims – Enterprises that:
- Manage collection of premiums.
- Use technology to improve payment systems and claim setllements.
- Use technology to provide transparency.
APPLICATION DEADLINE: APRIL 30, 2019
TO APPLY AND KNOW MORE: bit.ly/insuretechchallenge
