LM Re announces new partnership for parametric solutions for Kenyan coffee farmers
LM Re announces new partnership for parametric solutions for Kenyan coffee farmers | Insurance Business Canada
Reinsurance
LM Re announces new partnership for parametric solutions for Kenyan coffee farmers
It seeks to protect the industry from financial losses caused by drought
Reinsurance
By
Kenneth Araullo
Liberty Mutual Reinsurance (LM Re) has announced a partnership with Insurtech firm Sprout, Inc and Kenyan financial services company Britam to introduce a new parametric insurance product aimed at protecting Kenyan coffee growers from financial losses caused by drought.
This new product, developed through collaboration at the Lloyd’s Lab Launchpad Pitch, is designed to provide swift payouts triggered by specific weather events.
According to LM Re, this feature offers immediate financial support to coffee farmers facing the risk of crop failure due to adverse weather conditions.
Sprout brings its expertise in technology-driven agricultural insurance solutions to the partnership, utilizing satellite data and machine learning to analyze historical weather patterns. This technology enables farmers to sustain productivity despite challenges posed by climate change.
The insurance product not only addresses climate risks but also meets the specific needs of coffee growers by including real-time advisory services. These services help farmers adapt their practices based on weather forecasts, which enhances their resilience to climate-related challenges.
The product’s premium is funded by global coffee buyers, reducing operational costs for Kenyan farmers and supporting local agricultural operations. This approach aims to help farmers recover quickly from adverse conditions, thus maintaining their livelihoods.
By keeping financial resources within Kenya and supporting local agriculture, the insurance product also seeks to strengthen the local economy and promote sustainable farming practices, offering essential protection for farmers amid growing climate uncertainty.
The product is launched in partnership with Britam, a Kenyan insurer, in line with efforts to close the insurance gap and provide more comprehensive coverage options for local farmers. This aligns with both regulatory and industry objectives to support vulnerable populations and enhance financial inclusion.
Jean-Christophe Garaix (pictured above), head of agriculture and parametrics at Liberty Mutual Re, stated that the launch reflects the company’s commitment to delivering innovative insurance solutions that help local communities in emerging markets build climate resilience.
He highlighted the partnership with Sprout as a combination of reinsurance expertise and deep agricultural knowledge, resulting in a product that provides tangible benefits to Kenyan farmers and contributes to economic stability.
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