Lessons learned: insuring agricultural producers against climate risks

With droughts, floods and other climatic hazards intensifying, index-based agricultural insurance stands as an innovative solution for protecting the incomes of small producers.

Index-based agricultural insurance compensates farmers whenever an objective weather indicator such as rainfall or temperature crosses a set threshold, without having to observe the damage on the ground.

ADA recently carried out capitalization work on seven projects in West Africa rolled out in collaboration with local partners. The aim was to strengthen expertise in inclusive agricultural insurance and integrate the most effective and relevant solutions in support of agricultural value chains.

The main takeaways of this work are as follows:

Combined solutions bring more value to producers

Combining insurance with other essential services, such as access to agricultural inputs and credit, serves to better meet the needs of producers and boost their interest in the product.

Trust hinges on close and varied distributors

Involving local players, such as microfinance institutions and community leaders, in the distribution of index-based insurance makes it possible to reach more producers, strengthen their trust and facilitate the take-up of insurance solutions.

Continuous adaptation is key to sustainability

To ensure long-term impact, insurance products need to evolve regularly based on feedback from customers and stakeholders. This approach strengthens not just the relevance of the product but also the long-term commitment of the players involved.

Strengthening agricultural resilience in Mali: OKO adapts index-based insurance services

In Mali, ADA supported OKO, an insurtech, in the distribution of index-based agricultural insurance via mobile phone to small corn producers. The project succeeded in improving services, notably through the implementation of a local server and a satisfaction survey. The results of the survey highlighted the need for clearer oral communication and direct contact with agents. To that end, OKO has developed relevant tools, such as a call centre and voice messages in the local language on WhatsApp.

Read the full publication and find out about the lessons learned by ADA and its partners.