FESA Micro-Insurance to offer free drought insurance design

Report
from EARS
Published on 14 Mar 2013

Delft, March 2013

Aiming to serve all African farmers, FESA Micro-insurance is growing fast. But, large scale crop insurance puts special demands. Using automated insurance design and monitoring tools, EARS has developed a geo-information approach to crop insurance. Mapped insurance designs can be provided for the entire region, thus allowing for unrestricted sales. This enhanced capability is also reflected in the offer to develop proof-of-concept, free drought insurance design.

FESA Micro-Insurance is a drought and excessive precipitation insurance system, developed by EARS Earth Environment Monitoring Ltd, a remote sensing and climate services provider in Delft, the Netherlands. The FESA initiative started in 2009 with financial support of the Ministry of Foreign Affairs in this country. The aim is to develop crop micro-insurance reaching every farmer in Africa. Drought risk analysis is based on more than 30 year of Meteosat relative evapotranspiration (RE) data. Scientific studies and FAO reports show RE to be proportional to crop growth. In this respect RE is considered a more suitable drought insurance index than precipitation.

2012 was a successful year. Drought insurance has developed for a dozen of projects in Mali, Burkina Faso, Benin, Kenya, Tanzania, Rwanda, Mozambique and Malawi. These projects were carried out in cooperation with PlaNet Guarantee and other micro-insurance partners. The number of actually insured farmers reached 23 thousand. This number is expected to double every year.

FESA drought insurance can be developed for every location in Africa without the need to have weather stations around. Therefore, there is a high potential to grow. EARS is currently confronted with the task to develop insurance for thousands of locations on the continent. The challenge has been addressed by developing more fully automated tools. This has resulted in a geo-information approach, where drought risk and insurance design parameters such as strike, exit and premium, are mapped for an entire region. In this way there is maximum spatial coverage and no limitation to selling the insurance product to farmers. This helps reaching a scale where crop drought insurance becomes financially sustainable and affordable to every farmer.

To demonstrate its enhanced capability, EARS is providing free drought insurance design for up to ten locations to relevant stakeholders. Interested parties must explain their interest and specify crop, sowing/planting window, length of growing season, as well as the name and decimal coordinates of the locations for which the insurance is to be developed.

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For information please contact:
Andries Rosema, Jolien van Huystee
EARS Earth Environment Monitoring BV
Kanaalweg 1, 2628 EB Delft, the Netherlands
Email: fesa@ears.nl, tel +31-15-2562404