The Syngenta Foundation’s Kilimo Salama weather index insurance program has taken off in Kenya and has recently expanded to Rwanda. Beginning in 2009 with a pilot project offering index insurance to 200 farmers, at last count 51,000 farmers in Kenya and 14,000 farmers in Rwanda have the insurance. In 2011, Kilimo Salama’s partner UAP Insurance collected KSh 19 million in premium payments, and premium revenue has nearly doubled to KSh 33 million in just the first six months of 2012. These premium volumes are approaching levels than can make index insurance economically sustainable in the long term in Africa.
Mobile phone technology has proven pivotal to the program’s success. Syngenta Foundation, on behalf of Kilimo Salama, partnered with telecom giant Safaricom in 2010, which provided a less expensive and dense communications network for product sales and customer communication. Safaricom’s M-PESA mobile banking system helps Kilimo Salama to keep index insurance premiums affordable for smallholder farmers and actually makes reaching them economically viable for insurance companies for the first time. Farmers receive their index insurance policy numbers and premium receipts via SMS, and payouts likewise are sent electronically via M-PESA.