How can satellite data help to reduce delivery costs of area-yield index insurance?
Smallholder families that use agricultural insurance can increase investments in more productive farming and nonfarming ventures as they feel more confident in managing related risks. However, significantly scaling the use of agricultural insurance among smallholders has been difficult in many parts of the world, especially in Africa.
Increasingly, satellite data are being explored to drive further innovation in smallholder agricultural insurance, as illustrated by a collaboration in Nigeria and Kenya between CGAP and Pula, an insurance and technology company that targets smallholders in Africa and Asia. This brief shares lessons from this collaboration and suggests a practical way that satellite data can be used to significantly reduce delivery costs of area-yield index insurance offered to smallholder families in Africa.