Since 2015, Sellan insurtech based in Kenya, wants to increase access to agricultural insurance by smallholder farmers across emerging markets, protecting them against losses from pests, disease and/or extreme weather events such as floods and droughts.
So far, the insurtech has helped 15.4 million farmers in Africa, Asia and Latin America get insured, and it’s eyeing more after a $20 million Series B funding round that will allow it to build new partnerships, including coverage animals.
Global investment manager BlueOrchard led the round through its InsuResilience strategy, which aims to provide access to climate insurance for vulnerable people in emerging markets. 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 drive Pula’s growth globally is a very exciting milestone in advancing our triple 100 vision, through which we aim to insure 100 million smallholder farmers. What started nine years ago as an unconventional idea that many considered unscalable is now a proven solution that has solved real needs for millions of smallholder farmers in 22 countries,” said Pula’s CEO. Thomas Njeruwho co-founded insurtech with Rose Gosling. (Both co-founders have farming backgrounds.)
Pula co-founders Rose Goslinga and Thomas Njeru. Image credits: Sell
Pula integrates insurance into its partners’ products
Instead of selling insurance directly to farmers, Pula has built a distribution channel with more than 100 partners, including charities, banks, governments and agricultural input companies, to serve even hard-to-reach farmers by integrating insurance into, for example, input costs agricultural holding or credit.
Every product offered by Pula is adapted to the requirements of its customers and the needs of the beneficiary farmers. Products, underwritten by insurance and reinsurance companies, are designed (including premium setting) through Pula’s digital actuarial platform, based on historical data, including weather conditions and the frequency of events such as floods or droughts, harvests, losses and inflows that they are used.
Among its partnerships is a long-standing partnership with the government of Zambia, where insurtech integrates insurance premiums with fertilizer and seed packages, reaching farmers across the country. In Ethiopia, he worked with the World Food Program and the German Development Bank KfW and a local insurance company, where he integrated insurance into the input voucher program that reached 122,000 farmers. And its impact is set to be felt following an outbreak of wheat rust in the Amhara region, where Pula is set to make its biggest insurance payout to date, estimated at $800,000.
Pula says they have seen increased investment, returns and savings from farmers using its products, highlighting the benefits agricultural insurance holds for emerging markets such as Africa, where small-scale farmers contributes 70% of the food supply even only 1% of these are covered. High cost, lack of information and access are some of the barriers to accessing agricultural insurance.
“Research carried out by Pula in some African countries where we have delivered insurance shows that agricultural insurance helps smallholder farmers to increase their farm investment by an average of 16%, improve returns by 56% and increase their savings households up to 170%. Also, the impact on farmers’ livelihoods can be seen through our partner insurance company’s payouts — which have reached close to more than $40 million to 900,000 farmers since Pula’s inception to date,” said Njeru.
“Finally, our impact is reflected in our rate of renewal and growth. Eighty percent of farmer groups and aggregators that purchase insurance products developed in Pula from our partner insurers renew in the following year, which is above the industry average and reflects our customers’ satisfaction with the integrated products us”.
Building on the success of its crop insurance products, Pula is set to introduce livestock covers in countries such as Kenya after completing a pilot program launched in Nigeria last year. Pula, through insurance partners, offers farming families in Nigeria comprehensive cover against animal robbery, disease and death. It is also doubling down on Asia and Latin America, markets it entered in 2021.
