I recently learned about an interesting concept taking place in Africa targeting small farming businesses.  The idea behind it is that African farmers generally operate with no insurance.  This can lead to major issues if anything happens to the farm such as low rainfall, fire, or other issues that can befall a home / farm owner.  The solution companies like MicroEnsure and Pula are offering is micro insurance, a low cost way for African farmers to insure their farm and their business.

Currently, insurers “have been slow to tailor their products to the African continent, experts say, and their methods of operation, using complex contracts distributed through networks of agents, tends to only reach the urban elite.”  This has created the opportunity for an inexpensive, tech-driven micro-insurance solution for ordinary Africans to use.

The solutions are very specific in their target markets such as MicroEnsure which “offers micro-insurance to small-business owners, ranging from farmers in the bush to small kiosk owners in downtown Nairobi.” and Pula which insurers from “poor rainfall, army worm infestations and other threats to their crops.”

In addition to insurance companies like Pula also bundle “policies into small loans or purchases of fertilizer so small-hold farmers are automatically insured.”

While new in the insurance space the innovation seems to be starting and learning how micro insurers grow will be interesting in the growing continent of Africa.

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