Since 2015, Pula, an insurtech company located in Kenya, has focused on improving the availability of agricultural insurance for small-scale farmers in developing countries. This insurance protects them against financial losses caused by pests, illnesses, and severe weather conditions such as floods and droughts.
Up to this point, the insurtech company has provided insurance coverage to 15.4 million farmers in Africa, Asia, and Latin America. With the recent $20 million series B fundraising round, the company plans to form new partnerships, particularly for livestock insurance, and expand its reach further.
The financing was headed by BlueOrchard, a global investment manager, via its InsuResilience strategy. This strategy focuses on providing climate insurance to individuals in developing nations who are particularly susceptible. The IFC, via its $225 million venture capital platform, together with the Bill & Melinda Gates Foundation, Hesabu Capital, and current investors, also took part in the funding round.
Collaborating with this group of investors who share our goals is an exhilarating achievement in advancing our ambitious triple 100 vision. This vision aims to provide insurance to 100 million smallholder farmers worldwide, and partnering with these like-minded investors will help us achieve this goal. “The idea, which was initially considered un-scalable, has now become a proven solution that has successfully addressed the needs of millions of smallholder farmers in 22 countries,” said Pula CEO Thomas Njeru, who co-founded the insurtech company with Rose Goslinga nine years ago. (Both co-founders possess agriculture expertise.)
Pula integrates insurance into the goods of its partners.
Pula has established a network of more than 100 partners, such as charitable organizations, banks, governments, and agricultural input companies, to distribute insurance to farmers. This allows them to reach even the most remote farmers by incorporating insurance into farm input expenses or credit.
Every product offered by Pula is tailored to meet the specific requirements of its customers and the needs of the farmers who will benefit from it. Pula’s digital actuary platform is used to build the products, including premium setting, based on historical data like as weather patterns, frequency of occurrences like floods or drought, harvests, losses, and inputs utilized. These policies are insured by insurance and reinsurance firms.
One of its partnerships is a durable cooperation with the government of Zambia, in which the insurtech integrates insurance premiums with fertilizer and seed bundles, effectively reaching farmers across the whole nation. In Ethiopia, it formed partnerships with the World Food Programme, the German Development Bank KfW, and a local insurer. Through these partnerships, it integrated insurance into the input voucher plan, benefiting a total of 122,000 farmers. The effect of the outbreak of wheat rust disease in the Amhara area is imminent, and Pula is expected to make the highest insurance claim to yet, estimated at $800,000.
Pula asserts that farmers who use its products have seen augmented investment, yields, and savings. This highlights the potential advantages of agricultural insurance for developing countries likerica, where small-scale farmers account for 70% of the food supply but only 1% of them have insurance coverage. Barriers to obtaining agriculture insurance include high costs, limited understanding, and a lack of access.
Pula has conducted research in several African nations where we have provided insurance, demonstrating that agricultural insurance helps small-scale farmers increase their farm investment by an average of 16%, enhance crop yields by 56%, and boost household savings by up to 170%. “Moreover, our partner insurer’s payouts, totaling nearly $40 million for 900,000 farmers since Pula’s establishment, demonstrate the impact on farmers’ livelihoods,” Njeru said.
Finally, our pace of renewal and expansion demonstrates our influence. Our partner insurers have a renewal rate of 80% among farmer groups and aggregators that purchase Pula-developed insurance products. This rate is higher than the norm in the sector and demonstrates the pleasure our clients find in our complete solutions.
Pula plans to expand its insurance offerings to include livestock coverage in countries such as Kenya after a successful trial run in Nigeria last year. Pula, in collaboration with insurance partners, provides extensive insurance coverage to rural people in Nigeria, protecting them against banditry, diseases, and animal mortality. Furthermore, it is intensifying its focus on Asia and Latin America, regions it ventured into in 2021.
