The payments were made after satellite data, which is used in delivery of Jubilee’s index crop insurance, identified areas in Kerio Valley which had received inadequate rainfall, therefore affecting the cotton crop yield.
“This product is part of Jubilee’s efforts to expand its micro insurance and crop insurance, using technology as a medium that best delivers to low income earners,” Jubilee Insurance Kenya CEO Patrick Tumbo said.
Jubilee has provided the cover to majority of cotton farmers in Kerio Valley since the product launch earlier this year and plans to expand it to other cotton growing areas in Kenya.
Jubilee also offers crop insurance for sorghum, maize and horticulture farmers across the country.
Jubilee made the first claim payment to Boresha Sacco Society, which has financed the cotton farmers, while Rift Valley Products provides market for the cotton.
The compensation payment was Sh193,000 for small scale farmers in Kerio Valley, financed by Boresha Sacco Society and insured by Jubilee.
Under the agreement, East Africa Challenge Fund provides financial support for the development of the insurance product, Planet Guarantee coordinates training and awareness to the farmers while SwissRe provides reinsurance support.
“Jubilee’s crop insurance is driven by the fact that most Kenyan farmers are small scale, and technology makes the product easily accessible and affordable,” Tumbo said.
The satellite technology works by obtaining rainfall data of the areas under coverage, precisely than any other technology.
When the index is triggered, all the farmers registered in that location benefit from the insurance payout without need for the farmer to declare.
Jubilee has partnered with Planet Guarantee and EARS Earth Environment Monitoring centre based in Delft, Netherlands, to develop the product and coordinate provision of the satellite data during the insurance period.
Tumbo emphasised that Index crop insurance opens a new hope for small scale farmers who often suffer perennial weather related losses.