Kathmandu. Four Nepali organizations, which have collaborated under the Initiative for Insurance Institute Lab, have implemented the country’s first satellite-based weather index insurance master plan for Nepali farmers. The collaboration aims to provide critical protection to over 10,000 farmers in Nepal against risks such as drought and extreme heat.
In this project, leading climate insurance technology startup PlantSat has partnered with Shikhar Insurance Company. The partnership will revolutionize how smallholder farmers manage climate risks. They have a broad network of over 1,300 agricultural cooperatives and 1.3 million agricultural households under the Central Federation of Nepal Agricultural Cooperatives. It will support distribution and network development. E-Sewa Nepal’s leading digital wallet will facilitate the insurance premium collection and payment process through its e-wallet services.
Initially proposed as a potential second master plan during the Initiative for Inclusive Insurance-Lab, this insurance solution has been successfully implemented after the completion of the official lab process. It uses satellite technology to automate the payment process based on real-time weather data. Which provides timely compensation to farmers when needed.
The project is initially starting by providing critical protection to maize and rice farmers from climate extremes such as drought and extreme heat.
Why satellite-based index insurance?
80 percent of farms in Nepal are either too small or too remote. This makes traditional insurance methods expensive and impractical. Furthermore, ground-based weather stations are limited and do not cover all areas. However, satellite technology has changed this situation. It can cover every part of Nepal, providing a comprehensive solution that removes the usual barriers of cost and access. This means a fast and automated claim payment system for farmers when specific weather conditions are met.
How will farmers benefit?
- Satellite-based weather index-based insurance plans designed to combat the risks of drought and extreme heat.
- Hassle-free enrollment and claims User-friendly digital tools for processing.
- Fast and automated payments help farmers efficiently manage and mitigate the impact of adverse weather conditions, so they can recover faster.
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Farmers receive automatic claim payments when specific satellite-based weather-based environmental conditions are met. This reduces delays and costs in claim payments and makes it much easier for them to get the support they need when they need it.
PlantSat’s main objective is to scale this project to support millions of farmers across Nepal. This ensures that every farmer can invest in their crops without the fear of losing everything due to climate change.
