MyUbuntu - Leadway - Brazil: Travel grant application

Delivering agricultural insurance in infrastructure-poor areas

Project Partners: Meadway Assurance Company Limited and MyUbuntu Limited

A UK-Nigeria-Brazil Knowledge Exchange for Enhanced Climate Resilience via Index Insurance. This project brings together partners from the UK and Nigeria who will engage in knowledge exchange and solution scoping with stakeholders in Brazil on satellite-based index insurance – particularly flood-related products.

Both partners are currently active in the design and distribution of such products and seek to deepen their expertise through exposure to Brazil’s advanced experience, both in terms of the design and distribution of such products as well as their interfacing with public subsidy schemes. The visit will include exchanges on data solutions, dissemination models, and public-private collaboration in the delivery of agricultural insurance.

Agricultural insurance is widely recognised as a key enabler of Climate Smart Agriculture (CSA). Given that farmers may not be in a position to bear the risks and costs associated with the investment needed to transition to climate smart practices, insurance coverage plays a critical role in providing a financial safety net in times of crisis – thus reducing the risks associated with new investments – as well as facilitating access to credit for farmers who are often deemed too risky by financial institutions.

Index-based insurance is particularly well-suited to smallholder and developing country contexts as rather than compensating for individually assessed losses, payouts are triggered by independently verifiable indices – such as rainfall or flood data – lowering administrative costs and enabling faster disbursement. This makes it possible to reach farmers in infrastructure-poor areas while reducing moral hazard and providing timely support to safeguard yields and livelihoods.

Following from the above, the project has four overarching objectives which include:

• Engaging with Brazilian stakeholders on the design and data systems underpinning satellite-based index insurance, with a focus on flood products.
• Examining the dissemination and distribution strategies employed in Brazil and assess their relevance to other agricultural contexts.
• Understanding how Brazilian actors interface with government subsidies for agricultural insurance and derive lessons applicable elsewhere.
• Sharing innovations addressing common challenges in index insurance, including basis risk and the timely execution of payouts.

The expected outcomes include:

• Developing actionable insights for broader and more equitable distribution models.
• Identification of potential technical partners/solutions – in the realm of data provision and payment solutions – to support product innovation and enhancement.
• Strengthening the capacity to develop and deliver cost-effective insurance products (particularly for flood risks).
• Deepening the understanding of product design and implementation in the context of government support/subsidy schemes.

For more information

For more information on this project, contact us, or view all projects funded under the Climate-Smart Agriculture Partnership programme.

Innovate UK Climate-Smart Agriculture Partnership: UK-Brazil-Africa brings together innovative people and organisations to promote climate-smart agriculture in Africa.