India operates the third largest crop insurance scheme in the world: PMFBY provided 300.000.000 policies to farmers since its launch in 2016, and has paid out €11 Bn worth of claims. However, many farmers complain about delays in payouts and intransparent assessments. Since the scheme has become voluntary in 2020, subscription rates have dwindled.
Together with Earth Analytics India and Precision Agriculture for Development, we implemented a pilot in the state of Odisha in India to test whether the combination of satellite data and text messages could increase uptake and improve payouts. The pilot was funded by the InsuResilience Solutions Fund.
Implementation was hampered by the lockdown measures caused by the Covid-19 pandemic. Still, we could show that information via text messages increases the financial literacy of farmers regarding the scheme, although it didn’t increase uptake. This suggests that other factors, for example the reputation of the scheme regarding payouts, play a major role for uptake. We were also able to capture the relevant information via satellite data analysis. This information source can speed up the claims assessment process. However, what we could not influence with our approach are the institutional mechanisms within the scheme that prolong payout decisions. Until these processes are made more efficient, the impact of technology will be limited. Just another case to prove that real change can only happen with all relevant actors on board, and with a systemic approach!
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