The distribution partner types are MFIs, banks, coops, retailers.
This insurance covers loan-taking smallholder farmers against adverse weather conditions through weather related index insurance. The more adverse the index, e.g. below-average rainfall, the higher the likely losses for the farmer and the higher the insurance payout. up to a maximum sum insured .
This is a group product, Compulsory (tied to agricultural loans) .
Cover: Adverse behavior of a weather index (as a proxy for actual losses) with payouts starting from a pre-defined trigger point (strike) and proceeding in notional steps until a pre-defined exit point, at which the maximum sum insured would be paid
The trigger, exit and sum insured depend on the location, season, crop, claim experience and business potential. Several weather indices can be used:
Sum Insured- Sum insured is equal to the inputs loan amount.
Premium Rate- 10 – 12% of loan amount, depending on crop and region
Premium Payment- Once at inception
This insurance cover is only sold in a 4 - 6 weeks sales window before planting season.