Five Ethiopian Insurers Unite under Pula to Protect 10 million Farmers

A consortium of five Ethiopian insurance companies, assembled by Pula Advisors, a Kenyan insure-tech firm, aims to provide 10 million farmers with bundled agricultural insurance services. Dubbed Ethiopia’s Agricultural Insurance Consortium (AICE), the ensemble includes Abay Insurance, Africa Insurance, Nyala Insurance, Oromia Insurance, and the state-owned Ethiopian Insurance Corporation (EIC). 

With Pula as the technical advisor, the Consortium, launched at the Hyatt Regency Hotel on Thursday, looks to tackle “persistent challenges” that have undermined the growth of Agri-insurance in Ethiopia. AICE aims to address low farmer awareness, underutilization of technology, limited technical capacity, and unaffordable premiums through an insurance scheme that starts off with 200 Birr annual premiums embedded within agricultural input purchases.

“Our packages are priced with affordability in mind,” said Dagmawi Haileyesus, Pula’s country manager.

The insurance package covers 14 perils, including yield losses from adverse weather, while claim settlements are calibrated based on the extent of losses

 “If one farmer who purchased 20,000 Birr worth of fertilizer sees 10% damage, and another who bought 1,0000 Birr worth suffers an 80% loss, their payouts are adjusted accordingly,” the country manager told Shega. 

He disclosed that AICE plans to collect up to 2 billion Birr in insurance premiums for the fiscal year. Embedding insurance into inputs was selected as an ideal point of entry for Pula due to its low cost and relatively straightforward way that allows Ethiopian farmers to become familiar to insurance.

 “For just 200 Birr premiums, we’re able to insure more than 1 million farmers primarily for fertilizer inputs,” Dagmawi says. 

Pula began operations a decade ago with an Area Yield Index Insurance product powered by field data that went on to insure 234,000 farmers. It has since expanded to over 19 million farmers in 12 countries, protecting $2.5 billion in agricultural investments. Last year, Pula announced its first round of payouts in Ethiopia, amounting to 39.4 million Birr to 51,000 smallholder farmers.

While Ethiopia’s smallholder farmers produce up to 95% of the national agricultural output, insurance is unheard of across most rural communities. This is indicative of the broader challenges of the insurance sector, which has a penetration rate of about 0.4%. Insure-tech platforms are increasingly demonstrating their ability to overcome barriers to insurance access through low-cost cost scalable tools. 

Since entering the Ethiopian market in 2023 by insuring 122,000 farmers, Pula has expanded coverage to over 1 million smallholders across the Tigray, Amhara, and Oromia regions. The goal for this fiscal year is to reach 3 million farmers, leveraging the country’s Input Voucher System (IVS) to scale rapidly. Plans are also underway to expand into livestock and crop-specific insurance products.  

AICE has integrated its offering with the government’s IVS, allowing risk to be pooled across large populations. This enables a large reduction in premiums and scalability of the insurance coverage to over 200 woredas (districts) nationwide.

Bridging the awareness gap is also central to the consortium’s success. AICE is rolling out targeted farmer outreach, including SMS campaigns, radio programs, roadshows, and training with agricultural extension workers to ensure farmers not only access insurance but also understand how it works and why it matters. 

The consortium will have access to Pula’s state-of-the-art digital infrastructure. Mauvoo, an AI-enabled data platform, supports real-time data collection at the farm level, with over 150 automated quality checks and more than 60 million data points processed annually. Additionally, the Pula Insurance Engine (PIE) facilitates product design, pricing, policy administration, and claims processing, supporting more standardized and data-driven insurance services.