OKO, a high-tech insurance for African farmers

A graduate of Luxembourg’s start-up acceleration programme Fit 4 Start, OKO combines satellite data and mobile phone technology to provide affordable and accessible crop insurance to farmers in Africa. The programme helped the company design its offering in a way that suits clients’ needs and ways of life.

Working for start-up company BIMA, young entrepreneur Simon Schwall was part of a pioneering initiative to sell life and health insurance in Papua New Guinea via mobile payments. The model was a success, but when severe drought hit the region, many people could neither pay their insurance nor basic necessities. “I realised that there was an enormous need for some kind of insurance for people who depend on agriculture for their livelihood. Crop insurance seemed to me to be the next obvious step.”

Mr Schwall quickly realised that the main stumbling block for setting up an affordable crop insurance model was the cost of verifying claims. His solution was to use satellite data, such as that made available for free by the European Space Agency’s earth observation programme Copernicus. “Satellite data makes it possible to evaluate whether a specific geographical area has been affected by a flood or drought due to weather condition without having to go on site,” he explains. Combining such data, mobile payment technology and considerable knowledge of providing insurance to low income makers in developing countries, OKO Crop Assurance was born.

Ensuring the product-market fit

OKO was originally set up in Israel, but after about a year in existence, the company obtained a place in Luxembourg’s Fit 4 Start programme. The regular feedback from the programme coaches proved very valuable.

“Fit 4 Start is strongly focused on making sure that your product really fits your customers’ needs,” says Mr Schwall. “Although we believed that we had a very good product, we realised that we still needed to make quite a few modifications to suit our clients. I learnt that you never know your customers well enough, and it is worth spending a lot of energy in the beginning to clarify how your solution can best fit their lifestyle and habits.”

Mr Schwall also appreciates the seed funding provided to Fit 4 Start participants. “At that early stage, it was difficult to find funding to run pilots and prove the model. The programme funding was really helpful.”

International to the core

The first official product launch took place in Mali in January 2020, and to date, over 1,000 farmers have subscribed. “Our offering is available to anyone who has a mobile phone. Potential clients can ask our call centre to contact them without having to use any phone credits, which is very helpful. We have also employed 17 sales representatives who go to cooperatives, farms and markets and explain how our insurance works.”

Today, OKO has staff in Israel, Mali and Luxembourg, which hosts the technical team. “There are many advantages of being in Luxembourg, in particular the attractive R&D incentives,” says Mr Schwall. “Luxembourg is also more welcoming to foreign workers than Israel. My CTO is from India, and it was a lot easier for him to get a visa in Luxembourg than in Israel.” Israel, on the other hand, offers a stimulating start-up environment, relatively low costs of living and a good visibility towards investors.

Making a difference

Together with its partners, telecommunications provider Orange and insurance company Allianz, OKO is now exploring new markets. The company is working on a pilot project in Uganda to provide insurance to the barley producers of a beer company. “Our offering is combined with their sustainability programme,” Mr Schwall points out. “We help them reach their sustainability goals, while making their farmers become more weather resilient and less financially vulnerable.”

The company won the second prize at the Fintech Awards 2019, one of the main fintech competitions in Luxembourg, and has been included in the list of the Top European fintech startups to follow in 2020 by Sifted, the Financial Times start-up media.