Evaluating and Optimizing the Impact of Pulas Insurance Products and Services

As climate change makes weather patterns more unpredictable, millions of smallholder farmers are increasingly vulnerable to droughts and other severe weather.

However, basic agricultural insurance that could protect livelihoods against the effects of climate change is generally too expensive for farmers working less than two hectares (five acres) of land and living on less than $2 per day.

To make insurance more accessible to smallholders, Pula Advisors sells insurance policies to governments and large farmer support programssuch as the Zambian Farmer Input Support Programme (FISP) or the World Food Programwhich, in turn, provide them to farmers as part of a social safety net bundle that may also include access to farming loans and inputs, such as high-quality seeds or fertilizer.

Although the potential value of agricultural insurance products is significant, the effects of an affordable and commercially viable insurance product like Pulas have not yet been rigorously tested.

With support from Development Innovation Ventures (DIV), Pula will conduct a randomized controlled trial to evaluate whether access to commercial insurance encourages farmers to invest in higher-quality inputs or equipment.

DIV funding will also enable Pula to use satellite data to automate its risk models and improve the quality and accuracy of its data collected from farm visits, which is costly to gather and can be error-prone.

The results of this award will inform public policy on the possible benefits of providing commercial-scale insurance as part of social support programs.