Pula, an insurtech based in Kenya, has since 2015 been keen on enhancing the access to agricultural insurance by small-holder farmers across emerging markets, shielding them against losses from pests, diseases and/or extreme weather events like floods and droughts.

So far, the insurtech has supported 15.4 million farmers in Africa, Asia and Latin America to get insured, and it is eyeing more following a $20 million series B funding that will enable it to establish new partnerships, including for livestock covers.

Global investment manager BlueOrchard led the round through its InsuResilience strategy, which aims at providing access to climate insurance to vulnerable people in emerging markets. The IFC, through its $225 million venture capital platform, the Bill & Melinda Gates Foundation, Hesabu Capital, and existing investors, also participated in the round.

“Partnering with this group of like-minded investors to boost the growth of Pula globally is a very exciting milestone in driving our triple 100 vision, through which we intend to bring insurance to 100 million smallholder farmers. What started nine years ago as an unconventional idea that many deemed un-scalable is now a proven solution that has solved real needs for millions of smallholder farmers across 22 countries,” said Pula CEO Thomas Njeru, who co-founded the insurtech with Rose Goslinga.

Pula co-founders Rose Goslinga and Thomas Njeru have agricultural backgrounds. Image Credits: Pula

Pula embeds insurance in partners’ products

Instead of selling insurance directly to farmers, Pula has built a distribution channel of over 100 partners, including charitable organizations, banks, governments and agricultural input companies, to serve even the hard-to-reach farmers, by embedding insurance, for instance, in farm input costs or credit.

Each product Pula offers is customized to suit the demands of its clients, and the needs of the beneficiary farmers. The products, underwritten by insurance and reinsurance companies, are designed (including premium setting) through Pula’s digital actuary platform, based on historical data including weather patterns, and the frequency of events like floods or drought, harvests, losses and inputs used.

Among its collaborations is a long-term partnership with the government of Zambia, where the insurtech embeds insurance premiums with fertilizer and seed packages, reaching farmers across the country. In Ethiopia, it partnered with the World Food Programme and German Development Bank KfW and a local insurer, where it embedded insurance in the input voucher scheme that reached 122,000 farmers. And its impact is about to be felt following an outbreak of wheat rust disease in the Amhara region, where Pula is set to make the largest insurance payout to date, estimated at $800,000.

Pula says they have seen increased investment, yields and savings by farmers using its products, underscoring the benefits that agricultural insurance portends for emerging markets like Africa, where small-scale farmers contribute 70% of the food supply yet only 1% of them are covered. High-cost, lack of awareness and access are some of the barriers to agricultural insurance access.

“Research carried out by Pula in some African countries where we have delivered insurance shows that agricultural insurance helps smallholder farmers to on average increase investment in their farms by 16%, improve yields by 56%, and increase household savings by up to 170%. Also, an impact on farmers’ livelihoods can be seen through our partner insurer’s payouts – which have reached close to over US$40 million to 900,000 farmers since Pula’s inception to date,” said Njeru.

“Lastly, our impact is reflected in our renewal rate and growth. Eighty percent of the farmer groups and aggregators that buy Pula-developed insurance products from our partner insurers renew the following year, which is above the industry average, and reflects our customers satisfaction with our comprehensive products.”

Building on the success of its crop insurance products, Pula is set to introduce livestock covers in countries like Kenya upon the completion of a pilot program that kicked-off in Nigeria last year. Pula, through insurance partners, has been offering rural families in Nigeria comprehensive coverage against banditry, disease and death of animals. It is also doubling down on Asia and Latin America, markets its entered in 2021.