Fast-Paying Flood Insurance Pilot in Africa by Climate Tech Firm

March 6, 2024
1 min read


TLDR:

  • Small farmers in Africa face climate change impacts with no insurance.
  • Floodbase to offer fast-paying flood insurance using parametric insurance in Malawi and Mozambique.

Climate Tech Firm to Pilot Fast-Paying Flood Insurance in Africa

Climate change is particularly perilous for small farmers in Africa, with traditional insurance products often unavailable or financially out of reach. To address this, Floodbase is partnering with organizations to offer parametric flood insurance to small farmers in Malawi and Mozambique. The project has received a grant from USAID and private capital matching. Parametric insurance, a niche but fast-growing form of indemnity, offers rapid payouts based on trigger points such as rainfall levels. Floodbase uses satellite data for accurate flood predictions and real-time maps to enable timely payouts. The startup aims to scale the approach to close the insurance gap in Africa.

The project’s success relies on affordable premiums and outreach to encourage farmer participation. Floodbase is leveraging the grant money to design a sustainable and accessible program that does not require government subsidies. The company estimates that with premiums less than $10 and payouts limited to $100, about 20,000 farmers in the two countries can be reached. The goal is to provide critical support to farmers in the event of disasters like Cyclone Idai, helping them avoid dislocation and hunger.

Overall, Floodbase’s initiative represents a significant step towards addressing the impact of climate change on small farmers in Africa through innovative and accessible insurance solutions.


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