MICROCAPITAL BRIEF: UAP Insurance of Kenya, Safaricom and the Syngenta Foundation for Sustainable Agriculture to Expand Mobile Microinsurance Program in Kenya

A recent article in The Economist weekly magazine brings attention to the expansion of a new microinsurance scheme in Kenya, known as Kilimo Salama, or “safe farming,” which uses mobile phones and automated solar-power weather stations to provide crop insurance to low-income farmers. The scheme began as a trial program last year, serving 200 farmers, and is expected to reach 5,000 Kenyan farmers this year. It was organized by UAP Insurance of Kenya; Safaricom, a mobile-nework operator, and the Syngenta Foundation for Sustainable Agriculture, part of a Swiss agribusiness group.

To participate in the program, farmers pay an extra five percent to insure products such as seed, fertilizer or herbicide against crop failure. Their policies are then registered and confirmed via mobile phone. A weather index-based system estimates the extent to which crops have been damaged and how much money should be paid out. Lastly, payouts are made directly to farmers’ mobile phones.

By Stefanie Rubin, Research Associate

About UAP Insurance Limited:

UAP Insurance Limited is an insurance provider based in Nairobi, Kenya, that operates in Kenya, Uganda, and Southern Sudan. It was formed in 1994 after the merger of Union Insurance and Provincial Insurance. The company’s products include commercial, life, travel, corporate medical, and political violence and terrorism insurance. Additionally, along with Equity Bank, a commercial bank in Kenya, UAP Insurance has launched a program that incorporates satellite technology to provide herders with insurance for their livestock in the event of drought and subsequent starvation.

According to its 2008 financial statements, UAP had KES 9.4 billion (USD 121.5 million) in total assets, KES 446 million (USD 5.8 million) in taxes before profit and an investment income of KES 382 million (USD 4.9 million) as of year-end 2008.

Additional Resources:

Source Article: The Economist: “Security for Shillings: Insuring Crops With a Mobile Phone,” http://www.economist.com/business-finance/displaystory.cfm?story_id=15663856

MicroCapital Universe: UAP Insurance Limited: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=UAP+Insurance+Limited

UAP Insurance Financials: http://www.uapkenya.com/about-uap/financials/

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