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FEATURE STORYJune 15, 2022

Disruptive Innovations Boost Uptake of Agriculture Insurance Solutions in Kenya

Disruptive Innovations Boost Uptake of Agriculture Insurance Solutions in Kenya

Farmers activate the Bima Pima card through their phones, and receive insurance payouts through mobile accounts.

Photo: Acre Africa


  • The One Million Farmers Platform is using disruptive innovations to boost agricultural insurance in Kenya
  • More than 70,000 Kenyan farmers across 15 counties now enjoying affordable weather index insurance
  • The success of agriculture Insurance Solutions is a forward-thinking approach that builds the case for the development and uptake of more risk management solutions

NAIROBI, June 15, 2022—The penetration of risk management solutions in agriculture in Africa remains low, despite the sector’s high vulnerability to the impacts of climate change and market inefficiencies. But thanks to technological advancement, the advent of new challenges including climate change and the willingness of organizations to move the needle from the current 1% penetration, things are changing.

One such innovation designed to increase smallholder farmers’ resilience to climate change is weather index-based insurance, which leverages technology to help farmers manage climate risks.

Acre Africa, a beneficiary of the World Bank's One Million Farmers Platform (OMFP), is one group in Kenya that has ventured into these new technological territories. It offers farmers tailored crop insurance plans to help them mitigate crop failure due to adverse weather patterns. This is accomplished through the use of a micro-insurance product known as Bima Pima, which loosely translates to "insurance in affordable bits."

“At the start of the agricultural season, a farmer buys a Bima Pima scratch card with a bag of seeds or fertilizer, activates the card through his phone, pays an initial premium of KES 50 ($.50 cents), can top-up via SMS to increase the level of insurance coverage. ACRE Africa then geo-tags the farm using the mobile localization service,” said Ms. Muthithi Kinyanjui, Head of Partnerships and Market Systems, Acre Africa.

A combination of satellite and weather station data then determines whether the farmer will receive a payout directly on his mobile account in case of drought or excess rain on his land. The mix of smart design and digital innovation offers the farmers the ease of buying the scratch cards at local agri-dealers, use of the system, the capability to top up, and the options to pay for the premium in small amounts and over time.

The pricing model ensures that most farmers, 89% of whom had never accessed insurance services before, can afford insurance. A premium of KES 50, for instance, has a potential payout of 10% which is equivalent to KES 500 and would be enough to buy a bag of seedlings.

Acre Africa is also able to implement the Disruptive Agricultural Technology innovation across 15 counties in Kenya, up from three counties, and are serving more than 70,000 farmers, up from 10,000 farmers.

To enhance transparency, trust and to speed up payments to farmers, BIMA PIMA has personalized features and functionalities that help address concerns and mystery of insurance.

“A few days before harvesting, I received an MPESA message from ACRE Africa which was a pleasant surprise. I had forgotten that I had purchased a KES 50 insurance card during a session where they explained that I would be compensated in case of insufficient rainfall,” said Mary Mate, a farmer from Embu County. “Now that I see it works, I will continue to purchase this cover.”

Farmers’ livelihoods are dependent on yields, therefore reducing losses benefits them. “I can now comfortably feed my family, harvest up to 15 bags of maize up from three bags and this has made life less stressful,” said another Acre Africa farmer.

Use of technology reduces costs, improves attractiveness, profitability and reach by smallholder farmers. As a result, more farmers across the country are now warming up to the idea of taking up insurance. In the last four seasons between 2020 and 2021, KES 5 million worth of premiums were paid by farmers.

In addition, the setup of a revolving risk pool fund amounting to $15,000 has reduced compensation payout time from three weeks to instant payments. Moreover, Acre Africa leverages access to farmer organizations, secured through World Bank-funded programs such as the National Agricultural & Rural Inclusive Growth Project and Kenya Climate Smart Agriculture Project where they plug in their agents to pitch the insurance cards, lowering their transaction costs.

Other outcomes include:

  • A 50% increase in the uptake of Bima Pima by farmers from both high risk and low risk areas is a demonstration of a boost in confidence in insurance solutions.
  • From a profitability perspective, Acre Africa has become a profitable venture: from the $50,000 received as premiums in the last four seasons, $20,000 was paid out as compensation.
  • The OMFP partnership has also opened up avenues for collaboration for the provision of bundled insurance. A partnership with seed manufacturer Shamba Pride has led to fairly priced, bundled services whose last-mile distribution has boosted the uptake of the card.

“The success of BIMA PIMA is a forward-thinking approach that builds the case for the development and uptake of more risk management solutions,” said Vinay Vutukuru, World Bank Senior Agriculture Economist. “If scaled up and emulated by many, the model can potentially propel crop insurance to greater heights and support the sector’s transformation and resilience.”


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