With the emergence of agtech start-ups that rely on specific tech-led innovation within the insurance value chain, it has helped expedite the speed with which farmers receive necessary reimbursements and support.
How Governments Are Using AgTech For Better Insurance
Contributed by | Zimlon
Agricultural Insurance Market is expected to hit $32.8 Billion by 2022. Governments across the world have realized the potential of digital agriculture and are encouraging adoption by tapping into existing networks for farmers, rather than approaching each farmer individually. Zimlon sheds light on some of the more notable agtech collaborations between governments and industry bodies in crop insurance. In developing nations like Africa, smallholder farmers often do not have access to risk management products such as insurance to protect themselves. With the emergence of agtech start-ups that rely on specific tech-led innovation within the insurance value chain, it has helped expedite the speed with which farmers receive necessary reimbursements and support. According to a McKinsey report, automation can reduce the cost of a claims journey by as much as 30%. Agtech encapsulates a broad range of solutions that includes everything from the internet, mobile technologies and devices, robots and drones, digitally-delivered services and apps, ground-based sensors, and aerial imaging through to the analytics and artificial intelligence platforms needed to improve agricultural value chain transparency and to combat fraud.
In China and India, thanks to large-scale government programs that subsidize premium costs, most smallholders (193 million) are insured. In India, tech companies such as Skymet are using drones to provide agriculture survey services to insurance companies and the state governments of Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh. In Africa, Tel Aviv-based OKO, uses chatbots to determine the size of a field, crop type, and location to provide an insurance quote. The USAID Commodity Production and Marketing (CPM) Activity accessed mobile technology to collect information on smallholder farmers in Uganda and connect them to a range of digital financial services, bundling crop insurance and production loans to increase client value. At Planet Labs, a US satellite company partnered with UK’s AgSpace to deliver agtech tools to farmers.
USA - In the US, government-backed insurance plans help protect farmers from incurring huge losses after natural disasters. Farmers.gov, the US Department of Agriculture’s central digital platform targeted at American farmers was awarded $10 million from the Technology Modernization Fund in 2018.
China - In 2018, XAG, the leading drone manufacturer in China with strong support from the government, developed crop protection drones that can cover an area of 35 acres in as little as an hour, a task that would take days for farmers to do by hand.
Africa - One Acre Fund is one of the first major players to take up the Kenyan government’s crop insurance subsidy, extending coverage to 350,000 Kenyan clients in 2018. By harnessing financial and technological innovations, the government can provide timely and needed social protection to smallholder farmers at risk. In Kenya and Nigeria, Pula Advisors and its partners are using interactive voice response technology to ask farmers to report landmarks near their plots when they enroll in insurance.
India - SaaS-based agri-tech solutions provider, CropIn, has a tie-up with the Department of Agriculture (DOA), Government of Karnataka, aims to reach 6 million farmers by 2022. Backed by Chiratae Ventures and the Bill & Melinda Gates Foundation Strategic Investment Fund, the goal is to help farmers by monitoring 15 million acres via its tech platform.
Australia - The National Farmers’ Federation launched the NFF Digital Agriculture Service to give farmers access to vast quantities of data, as well as tools that supply realtime data to drive high-performance farm management that generates higher yields and lowers input costs. One such example of Australian innovation is the development of bees with backpacks containing micro-sensors and a spectral satellite-connected data analytics engine to estimate crop performance.
The content & opinions in this article are the authorâ€™s and do not necessarily represent the views of AgriTechTomorrow
Zimlon does in depth research on insurance topics including car insurance, home insurance, life insurance, and other specialized insurance areas.
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