Smart Contract Climate Insurance in Kenya
Developed in partnership with Mercy Corps Ventures
ACRE Africa tested the use of smart contracts in climate insurance to improve experiences for climate-impacted smallholder farmers in Kenya.
Website: https://acreafrica.com/
HQ: Nairobi, Kenya
Active Markets: Africa
Problem Addressed
Smallholder farmers in Africa are among the most climate-event vulnerable groups in the world, frequently experiencing negative impacts of extreme weather events and climate shocks. Current insurance options are slow, resource intensive, lack transparency, and often do not payout until after farmers have been devastated by an event.
Project Description
In 2021, Mercy Corps Ventures brought together ACRE Africa, decentralized insurance protocol Etherisc, Mercy Corps AgriFin, Ethereum Foundation, and Chainlink Foundation to integrate Etherisc’s blockchain smart contract platform into ACRE’s Bima Pima weather index insurance product. Using M-Pesa mobile payments, real-time meteorological data facilitated automatic payout disbursements for extreme weather events.
ACRE onboarded farmers from 11 Kenyan counties for insurance policies. GPS satellite data at each farmer’s location monitored for extreme weather events, automatically triggering payouts to eligible farmers via mobile money. The pilot’s use of blockchain enhanced transparency and reduced payout times.
Business Data
Status: Pilot complete
Constituency Served: smallholder farmers
Networks: Ethereum
Known Investors: AHL Ventures, Mercy Corps Ventures
Additional References: Pilot Launch Article
Progress to date
Smart contract integration led to 40% of claims being processed within 24 hours of policy triggers. Improved efficiencies and reduced administrative costs increased coverage for farmers by an amount of 27% when compared to the previous season. The pilot reduced average payout times by 64%.
Business Model
ACRE collects revenue through insurance policy premiums.
Traction
58% of participants reported improved experience with onboarding, communication, and access to policy information. Over half of participating farmers reported increased trust in the new smart contract product.