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Process flow of RHoK Payment 2 Mobile projectTRANSCRIPT
Seeds of Prosperity
Crop Insurance for Developing Countries
Ian Hopkins | Sandeep Chandur | Laura Boudreau | Daniel Broome
Problem Exposure to natural disasters reduces propensity to purchase
quality farm inputs. Fear of extreme weather events i.e. drought, flooding, wind, etc. prevents
small farmers from buying improved seed and other inputs. Example: half of Kenyan farmers use poor-quality seed from previous
harvests resulting in sub-optimal yields.
Crop insurance facilitates food security. Crop insurance mitigates exposure to extreme events, could facilitate access
to financing, encourages the use of higher quality inputs, ultimately improves yields, and food security.
Technology reduces cost of providing insurance. The provision of crop insurance is currently limited by the disproportionately
high administrative costs of conventional insurance practices. Innovative parametric insurance products reduce administrative complexity while SMS based payment interfaces provide for rapid and secure settlements.
There is a need for a platform capable of brokering, monitoring, settling, and auditing insurance coverage and payouts.
Slide 2
Solution Technology.
By using a very simple text message interface the solution provides an automated method of receiving input, brokering quotes, facilitating the purchase via payments by phone, confirming the purchase, monitoring weather conditions, and triggering payouts.
The platform was built in Java using Google AppEngine, Big Table and an SMS gateway.
The platform allows for pluggable insurance providers and protocol for expansion.
Slide 3
Process Flow
Slide 4a
Stakeholders and SystemsVendor
Customer
System
Insurance providers
Process Flow
Slide 4b
Request quote (SMS)
Quote - Request,<Cust ID>, <Location>,<Qty>, <Product>,[<Qty>,<Product>]
Customer
System
BuiltPlanned
Vendor
Return quote (SMS)
Source best quote
Process Flow
Slide 4c
Quote – Return,,<Cust ID>, <Premium>
Vendor
Customer
System
Insurance providers
BuiltPlanned
Execute purchase (SMS)
Initiate payment
Process Flow
Slide 4d
Pay premium
Quote – Return,,<Cust ID>, <Premium>
Agree purchase with customer
Vendor
Customer
System
Insurance providers
BuiltPlanned
Confirm payment
Process Flow
Slide 4e
Vendor
Customer
System
Insurance providers
BuiltPlanned
Coverage,<Policy Id>, <Expiry>,<Risk>, <Qty>,<Product>, [<Qty>,<Product>]
Confirm coverage with customer (SMS)
Process Flow
Slide 4f
Extreme weather event notification (SMS)
Customer
System
Insurance providers
BuiltPlanned
Initiate payment
Notify insurer
Process Flow
Slide 4g
Report payment
Notify customer (SMS)
Customer
System
Insurance providers
BuiltPlanned
Make payment to customer (SMS)
Availability of crop insurance will lead to a virtuous cycle of improved access to financing, the use of higher quality inputs, higher yield and improved food security.
Advantages to Rural Commuities
Slide 5
Advantages to Sponsoring Organization Gather statistics on farming in developing
countries Number of farmers, amount and value of inputs,
concentration of agricultural activity Direct participation in micro finance and insurance
Reduce dependence on NGO’s and local governments to distribute development funding
Create communities of farmers Ability to disseminate information to farmers (SMS)
Influence and accelerate the adoption of mobile money
Ability to measure and study mobile money economy
Slide 6
Role of Intermediary Governance
Independence from the interested parties will ensure the integrity of payouts. (i.e. by separating the collection of weather data from the insurance providers).
Protection against monopolistic practices By providing for multiple insurance providers and by
searching for the best quote the system will protect customers and prevent the emergence of monopolies.
Infrastructure investment As an intermediary responsible for transactional
integrity there will be a requirement to invest in weather monitoring infrastructure.
Slide 7
Accomplishments to Date & Next Steps Selection of insurance partners Refine requirements Investigation of SMS protocol Integration to mobile payment
infrastructure (M-PESA in Kenya) Security and auditing Develop commercial partnerships Infrastructure funding needed for
monitoring stations and enhancements technology development
Slide 8