Liberty Mutual Re (LM Re), Sprout and Britam have introduced a parametric insurance product to shield Kenyan coffee farmers from climate-related risks.
The initiative, emerging from the Lloyd’s Lab Launchpad Pitch, aims to provide immediate financial relief through swift payouts triggered by specific weather events.
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Sprout utilises satellite data and machine learning to analyse historical weather patterns, equipping farmers with the tools to sustain productivity in the face of climate adversity.
LM Re’s contribution includes designing the coverage structure and capacity allocation.
The product not only safeguards against climate perils but also caters to the unique requirements of coffee growers by integrating real-time advisory services, which advise on farming practices in response to weather forecasts.
The scheme, underpinned by premiums funded by global coffee buyers, aims to reduce operational costs for Kenyan farmers, allowing them to swiftly bounce back from detrimental weather conditions.
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By GlobalDataThis strategy is designed to keep financial resources within Kenya, support local agriculture and promote sustainable farming methods, thus providing a vital safety net amid growing climate volatility.
With the backing of Kenyan insurer Britam, the product aligns with regulatory and industry initiatives to bridge the insurance gap and offer more extensive coverage options for local farmers.
LM Re head of agriculture and parametrics Jean-Christophe Garaix said: “This launch is testament to our commitment to providing innovative insurance solutions that empower local communities in emerging markets to be more climate resilient.
“Partnering with Sprout allows us to combine our reinsurance expertise with their deep understanding of agricultural needs, resulting in a product that offers tangible benefits to Kenyan farmers and provides a stabilising effect for the local economy.”
Britam Group managing director and CEO Tom Gitogo said: “As part of our sustainability strategy, we aim to champion innovative microinsurance solutions that not only safeguard vulnerable populations, such as small-scale farmers, from climate risks but also deepen financial inclusion among the low-income population.
“These emerging risks are underserved in the market and to address this gap, Britam partners with local and global organisations to develop innovative solutions.”
Last month, LM Re established its Australian reinsurance operation, LM Re Australia.
This marked its expansion in Australasia and saw the reinsurer replace the ARUS managing general agent, which earlier managed LM Re’s portfolio in the market through Lloyd’s.
