1. SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Insuring Farm and Family: Innovative Risk Management Strategies in Developing Markets

2. Transferring risk to Increase Smallholder Investment SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Rain Index Insurance in Senegal Jean-Michel Voisard, Chief of Party, Feed the Future Senegal, Naatal Mbay, Engility

3. The FEED THE FUTURE SENEGAL NAATAL MBAY PROJECT SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Implemented by 60,000 Households to date An objective of 150,000 A Value Chain project targeting small cereal farmers through private sector driven systems. Cereal crops: Rice, Maize and Millet Technologies: Seeds and Best production/ post-harvest practices, Contract facilitation and Market linkages, Financial services. The Southern zone agriculture systems are rainfed: adoption of new technologies is directly linked to access to finance and mitigating the rainfall risk. IRRIGATED RICE RAINFED CROPS

4. Senegal rain index insurance Program Launched in 2012 – currently in its 4 th season Maize, Peanut, Millet, Upland Rice Rainfall risk coverage: input loan reimbursement Crop specific indices for 6 specific zones based on minimal seasonal rainfall requirements. Insurance cost to farmer is 4.5% to 16.0% of insured capital depending on rainfall risk in the zone Premium rates include a 50% government subsidy Three rainfall triggers over total crop cycle Sowing phase trigger: 30% of insured capital indemnity Growing phase triggers: 80% of insured indemnity indemnity SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge

5. SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Technology Rain gauges equipped with automated dataloggers Coverage radius: 7.5 km 51 rain gauges installed to date = 9,000 sq km Manual rain gauges managed by participating farmer groups Data collected by National Meteo Agency

6. CNAAS: Senegalese Agricultural Insurance Company – a Public Private Joint Venture PlaNet Guarantee Senegal: Technical partner and broker services to CNAAS ISRA : National Agriculture Research Institute technical oversight of Index development ANACIM: Senegalese Meteo Agency validates rainfall reports RE-INSURERS: SEN-RE, SWISS-RE, NCA-RE validate premium structure and re- insure at a regional level BANKS and MFIs: Issue loans to farmers and ultimate beneficiary of indemnity Farmer organizations: Coordinate farmer loan applications and premiums Ministry of Finance: Division of Insurance SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge Implementing partners

7. Installation of Rain Gauges Definition of index for new crops and expansion zones Pre-season sensitizations by farmer organizations and PlaNet Guarantee Premiums validated by re- insurers prior to marketing phase Farmer groups coordinate insurance marketing with loan application process ANACIM produces certified rainfall logs to CNAAS and re- insurers Claims calculated by CNAAS and PlaNet Guarantee Claims settled within 4 months of harvest Debrief with partner farmer organizations and banks

8. RESULTS TO DATE SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge 24 611 1471 3087 1213 14 15 Rice Milet Maize Total rural households in Rainfed production zones: +200K 2015 Program: 3087 producers (608 women) 3945 Ha $ 70,000 premiums $ 500,000 Insured Capital 2012-2014 Programs: 2106 policies $ 56,000 premiums $ 52,000 indemnities (99% paid out in 2014 drought) Participating farmers

9. Scaling strategy Breakeven point is estimated at 100,000 farms or a penetration rate of 50% of the region’s households Early premium validation and improvement of farmer led distribution system will accelerate adoption Integration of rain index insurance to mainstream agricultural lending by banks and large MFIs Increase of geographic coverage in automated rain gauges: 250 rain gauges - $1 million investment Integration of grassroots savings and loans and women’s savings groups Adaptation to very small scale lending for women rice farmers on less than 0.5 ha Diversification to Cotton crop to cover full rain fed portfolio SEEP Annual Conference 2015 Inclusion and Resilience: The Next Challenge

10. Lessons learned and way forward Synergy: the insurance program gains from multiple synergies from being a component of a value chain program with a multi-level risk reduction strategy Entry point: The product is well understood by farmers that are part of structured groups producing with at least 30% marketing objective. Distribution strategy: Connection to pre-existing crop aggregation and credit distribution networks (farmer groups or banks). Technology buy-in: Farmers need to be able to validate the rainfall data themselves using manual rain gauges controlled by their own membership Building trust: Sensitisation and debriefings by Insurance company are key Cost effectiveness: working relationship with the Meteo agency Competitiveness: Potential for competing models Sector support strategy: Capacity for Government to maintain subsidy levels at scale?