[Event Recap] Webinar 4: Lessons Learned from Fintech and Agritech for Agricultural Insurance and Finance | Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector
“Lessons Learned from Fintech and Agritech for Agricultural Insurance and Finance,” the fourth and final webinar in the Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector knowledge series, was held on October 19, 2023. The webinar focused on providing a landscape of technological advances and the latest applications of fintech and agritech to strengthen the financial resilience of livelihoods in the agricultural sector.
In the opening remarks, Jean Pesme (Global Director, Finance, Innovation & Competitiveness (FCI) Global Practice, World Bank Group), emphasized that many smallholder farmers lack access to financial services. Globally, only a small proportion of smallholder farmers are insured (e.g., 3% in Africa); this is despite the availability of index-based agriculture insurance for decades and more than 60% of countries providing premium subsidies - estimated at US$22.3 billion from the top 10 countries in 2019/20 – with a majority provided for micro-level programs. Of a total of 41 disaster index insurance programs with premium subsidies in Asia, 71% were micro-level. Jean further highlighted other challenges smallholder farmers face, such as low productivity levels, low adoption of high-quality inputs and technology, and limited market access. He emphasized the impact of digitization in closing the gap and the accelerated adoption rate of digital technologies after the pandemic. Jean concluded his opening remarks with lessons learned and the role of the public sector in facilitating the transition in creating a more conducive environment and the development sector in facilitating learning and investments in public goods.
Following the opening remarks, Qhelile Ndlovu (Financial Sector Specialist, Crisis and Disaster Risk Finance, World Bank Group), introduced the challenges in scaling up micro-level agriculture insurance, which affects both the supply and demand side. These challenges result in issues with respect to price (cost vs. affordability); accessibility (effective last-mile distribution channels and trust-based relationships); and customer experience (customization to meet farmers' complex needs). Next, she presented a case study on using a digital platform in Kenya, which has reached 450K Farmers, transforming the Last Mile Service Delivery in terms of inputs, extension, financial services, and market linkages. The platform enhanced the risk preparedness of small-scale farmers while enabling them to invest in the face of the risk. Furthermore, in case of a climate shock, the platform supports farmers to respond and recover.
The first speaker for the webinar, Roman Shynkarenko (Founder & CEO, Agroinsurance International Pty Ltd), presented various technological options available for agriculture insurance, providing some examples of these technological means. Roman also highlighted that technological advancements have significantly improved the accessibility of data, which can be leveraged to develop smart solutions. Finally, he argued that there are yet some challenges in the adoption of these new technologies, such as the cost of technology, functionality, accuracy, and lack of required human capital. However, some of these challenges can be addressed with training programs and providing special tech teams at insurance companies.
The second speaker for the evening, Amos Tabalia (Chief Impact Officer, Agriculture and Climate Risk Enterprise Limited [ACRE Africa]), presented the use of blockchain and mobile phones to scale up insurance. Amos discussed some challenges in the low uptake, including affordability and cumbersome claim processes that affect customers' trust. Explaining blockchain function, he emphasized the role of blockchain to enhance insurance uptake. Blockchain-based smart contracts can provide faster and cheaper weather index insurance solutions. Rapid claim payment and increased accountability address demand-side constraints and reduce operational costs, enhancing affordability. However, the adoption of blockchain has challenges like high initial costs, complex regulations, and data privacy concerns that require public sector attention.
The presentations were followed by an engaging question-and-answer session. The event, which was facilitated by Qhelile Ndlovu, was attended by over 130 participants, including practitioners and policymakers.
About the Knowledge Series:
The ‘Disaster Risk Financing Solutions for Climate-resilient Livelihoods in the Agricultural Sector Webinar Series’ aims to further deepen knowledge on agriculture insurance, and enable global knowledge exchange and collaboration among practitioners, technical counterparts, and policymakers of developing countries in designing and implementing disaster risk financing for agriculture. The series comprises four webinars delivered 4-6 weeks apart. Each webinar will be accompanied by a detailed fact sheet summarizing the key learnings. (View resources from the previous webinars here). The webinar series offers a chance to achieve a World Bank-endorsed participation certificate. This knowledge series builds on the success of the first knowledge series, ‘Strengthening Financial Resilience in Agriculture, ’ that was delivered virtually in 2021-2022 (click here for more information).
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