Heat Index Insurance for Poultry

IBISA is addressing a critical challenge faced by the poultry industry due to climate change: the adverse effects of heat stress on poultry, leading to substantial income and productivity losses for farmers. This problem is especially pronounced during summer, when temperatures often exceed thresholds that poultry can physiologically tolerate, resulting in decreased egg quality, lower meat yield, and higher mortality rates. Globally, the poultry sector is a vital component of agricultural economies, providing essential nutrition and income to billions. In India alone, the poultry industry is worth over $14 billion, supporting the livelihoods of millions of farmers. However, climate change has exacerbated the frequency and intensity of heatwaves, posing a significant threat to poultry productivity and farmer incomes.

Heat stress in poultry can lead to a production loss of up to 30%, impacting both small-scale and commercial farmers. The scale of the problem is vast, affecting communities globally, with developing countries being particularly vulnerable due to limited access to mitigative technologies and financial solutions. The World Bank estimates that climate change could push more than 100 million people into poverty by 2030, with agriculture-based livelihoods being among the most affected.

The factors contributing to the problem include:
Rising global temperatures: Increased frequency and intensity of heatwaves directly impact poultry health and productivity.
Lack of financial protection: Farmers often have no means to hedge against the financial losses caused by reduced poultry productivity due to heat stress.

Inadequate access to technology and information: Many farmers lack the resources to implement cooling technologies or to access timely information on impending heatwaves.

IBISA’s solution, the Heat Index Insurance for Poultry, directly addresses these challenges by providing a financial safety net to farmers facing the risk of income loss due to heat stress on their poultry. This innovative insurance product uses satellite-based data to measure temperature at specific locations. If the temperature exceeds a predetermined threshold for a certain number of days, it triggers an automatic payout to the insured farmers. This not only offers immediate financial relief but also encourages farmers to adopt more resilient farming practices.

Our product design considers local and global statistics on climate change's impact on agriculture, especially the poultry sector. With the pilot success in India covering over 23,000 beneficiaries, our solution demonstrates a scalable and impactful approach to mitigating climate risks in agriculture. By leveraging data-driven settlements and offering affordable, customizable insurance premiums, IBISA aims to extend this protection globally, targeting millions of farmers at risk of income loss due to climate-induced heat stress in poultry.

This Heat Index Insurance product specifically designed for the poultry industry uses advanced satellite-based data to monitor temperatures across various geographical locations, ensuring precise and reliable data collection without the need for physical site inspections.

How It Works:

1. Data Collection: Our solution utilizes satellite technology to accurately measure ambient temperatures at specific latitudes and longitudes. This approach leverages high-resolution data from trusted sources like ERA5 and the Indian Meteorological Department (IMD) to monitor heat conditions in real-time.
2. Threshold Trigger: The insurance product is structured around a heat index threshold, determined based on historical climate data and the specific tolerance levels of poultry to heat stress. If the temperature exceeds this threshold for a predetermined number of consecutive days or a cumulative number of days within a season, it automatically triggers a claim.
3. Automated Payouts: Once the threshold is exceeded, our system automatically initiates payouts to the insured farmers, with no need for them to file a claim. This process ensures timely financial support to mitigate the impact of heat stress on their poultry operations.
4. Affordable and Accessible: Premiums are designed to be affordable, starting from a minimal amount per bird, making it accessible to small-scale and commercial farmers alike. The insurance is customizable to suit the diverse needs of the poultry farming community across different regions.

Technology Used:

• Satellite Remote Sensing: To gather accurate and timely temperature data across vast geographic areas without physical presence.
• Data Analytics: For processing temperature data and identifying instances where the heat index exceeds the predetermined threshold, indicating a risk of heat stress to poultry.

IBISA's Heat Index Insurance serves the poultry farming community, a diverse group ranging from smallholder farmers to commercial operations, primarily in regions severely affected by climate change and heat stress. These farmers are integral to the agricultural ecosystem, providing essential food products and contributing significantly to local and national economies. However, they are currently underserved by traditional insurance products, which often do not cater to the mortality risk and specific risks associated with temperature fluctuations and the resulting stress on poultry.

Target Population:

• Smallholder Farmers: These farmers typically operate on a small scale and are particularly vulnerable to climate risks due to limited financial resources and access to technology. They often lack the means to invest in cooling equipment or infrastructure improvements that could mitigate heat stress on their poultry.
• Commercial Poultry Operations: While better equipped than smallholders, these operations also face substantial financial risks from heat stress, affecting their productivity and profitability.

Impact of the Solution:

1. Financial Security: By providing a financial safety net, our insurance product directly addresses the income instability caused by heat-induced stress in poultry. Payouts enable farmers to recover from losses more quickly, ensuring business continuity and protecting their livelihoods.
2. Accessibility and Inclusivity: The affordable and customizable nature of our insurance makes it accessible to farmers at all scales, including those who have historically been unable to afford or access agricultural insurance. This inclusivity promotes broader economic stability within rural communities.
3. Encourages Resilience: With financial protection against climate risks, farmers are more likely to invest in sustainable practices and innovations that reduce heat stress on poultry. This could include improved housing designs, nutritional adjustments, and other adaptive measures.
4. Data-Driven Insights: The use of satellite data not only ensures accurate and fair claims settlements but also provides farmers with valuable insights into climate trends. This information can inform better decision-making and preparedness for future climate risks.

Adding to the strengths of the IBISA team's diverse and global expertise, the team in India brings a critical local dimension to the table, enriching the organization's capacity to deliver tailored solutions to the agricultural sector. The Head of Growth, based in India, comes with a formidable background of 15 years in the Indian agriculture and allied sectors' insurance domain. This extensive experience encompasses a deep understanding of the challenges and opportunities within the Indian agricultural landscape, particularly in managing climate risks.

Moreover, the sales team in India further enhances IBISA's connection to the farming communities through their prior engagements with various channel partners. These include farmer producer companies, dairy cooperatives, milk unions, poultry federations/associations, and farmer groups. Such partnerships are instrumental in understanding the nuanced needs of the farming community, facilitating the design of insurance products that are not only technologically advanced but also practically applicable and accessible to the farmers.

The involvement of team members who have worked closely with the agricultural community in India ensures that IBISA's solutions are grounded in local realities. Their firsthand experience with the rural and agricultural insurance domain enables IBISA to navigate the complexities of offering insurance products in diverse geographical and climatic conditions that characterize the Indian subcontinent. This local expertise is complemented by IBISA's global perspective and technological prowess, making their insurance solutions both innovative and sensitive to the local needs and practices of the farming communities they aim to serve.

The capacity and expertise of the IBISA core team and founders significantly bolster the organization's ability to innovate and deliver specialized insurance solutions to the agricultural sector. The founding team comprises three individuals with complementary skill sets that form the backbone of IBISA's innovative approach. One founder is an actuarial expert, bringing in-depth knowledge of risk assessment and financial modeling, which is crucial for the design of insurance products. Another founder brings expertise in satellite technology, which is pivotal for the accurate and efficient collection of climate and weather-related data that underpins IBISA's index-based insurance products. The third founder contributes over 30 years of experience in the insurance industry, offering a wealth of knowledge in insurance product development, market strategies, and customer engagement.

Supporting the founders is a core team with specialized expertise in earth observation data, insurance operations, and technology. This combination of skills enables IBISA to leverage satellite data for precise weather and climate risk assessment, streamline insurance operations for efficiency and scalability, and develop tech-driven solutions that simplify the insurance process for farmers.

1. Pilot Stage: The concept has successfully transitioned to the pilot stage, demonstrating the practical viability and potential impact of the product on the poultry industry.
   
2. Focus on the Indian Poultry Market: Tailored for the unique needs of the Indian poultry market, our product design reflects a deep understanding of local conditions, with a vision to adapt and expand to other markets facing similar challenges.

3. Pilot in Andhra Pradesh: Currently, the product is being piloted in Andhra Pradesh, one of India's leading states for poultry production. This strategic choice allows for a comprehensive evaluation of the product's effectiveness in a significant poultry farming hub.

4. Coverage Achievement: In this pilot phase, we have successfully insured 500,000 birds within the layer segment, marking a significant step towards providing financial protection against climate-induced risks to poultry farmers.

5. Expansion to the Broiler Market: Recognizing the potential broader application of our product, discussions are underway to pilot the insurance product within the broiler market. We are optimistic about finalizing at least one pilot case in this segment shortly, further broadening our impact.

6. Innovation Recognition: As a new concept to the industry, the successful pilot in Andhra Pradesh is expected to significantly contribute to the product's development and acceptance in the market, particularly in anticipation of the next summer season when heat stress risks are most pronounced.

7. Market Awareness Efforts: Acknowledging the need for increased market awareness about this innovative insurance solution, we are actively working on outreach and education efforts to familiarize the poultry sector with the benefits and functionalities of the product.

8. Support from Local Insurers: Our innovative Heat Index Insurance product has garnered the support of local insurers, who recognize its value and potential impact on the poultry industry. This partnership is crucial for providing the necessary insurance backing for our unique offering. The endorsement from established insurers not only validates the concept conceptualized by IBISA but also facilitates the broader adoption and trust in our product within the market.

9. Toward a Global Solution: The insights and successes from our pilot and ongoing initiatives are instrumental in refining our product. These efforts are aimed at developing a robust, scalable solution to address the widespread challenge of climate risk in the poultry sector globally.

Through these steps, IBISA is not only testing and validating the Heat Index Insurance product but also laying the groundwork for its expansion and adaptation to serve broader markets. 

Applying to Solve represents a strategic move for us to overcome several key challenges and leverage opportunities to scale and enhance our innovative Poultry Heat Index Insurance product. While securing funding is beneficial, our primary motivations for engaging with Solve extend into several critical areas:

1. Technical Advancement: We hope to gain access to Solve's network of tech innovators and industry experts to further refine our use of satellite data and weather prediction algorithms. Technical partnerships could help us improve the accuracy and efficiency of our risk assessment models, making our insurance offerings even more reliable and accessible to farmers worldwide.

2. Market Expansion Support: Solve's global platform could provide us with the necessary connections to expand our product into new markets, particularly in regions that are highly vulnerable to climate change but have so far been underserved by traditional insurance products. Guidance on navigating these new markets, understanding local regulatory environments, and tailoring our products to meet diverse needs is invaluable.

3. Cultural and Community Engagement: Solving cultural barriers and effectively engaging with farming communities in diverse geographies are crucial for our product's success. Solve's experience in community-driven projects could offer insights and strategies for building trust and fostering adoption among target populations, ensuring our solutions are designed with and for the communities they aim to serve.

4.Collaboration and Networking: Joining the Solve community opens doors to potential collaborations with other Solver teams, NGOs, and industry stakeholders who share our mission of mitigating climate risks. These collaborations could lead to innovative approaches to distribution, awareness campaigns, and even product development.

5. Visibility and Credibility: Being selected as a Solver team would enhance our visibility, lending credibility to our efforts and attracting further support from investors, partners, and customers. This recognition could accelerate our growth and impact, helping us reach more farmers with our climate resilience solutions.

6. Expertise in New Product Launches: Engaging with Solve would also provide us with unparalleled access to expertise in launching new products, especially in the complex and varied agricultural insurance market. Solve's experience and resources could guide us in creating robust launch strategies tailored to different markets, identifying key stakeholders, and effectively managing the go-to-market phases. This support is crucial for the successful introduction of our Heat Index Insurance product into new regions, ensuring we address market-specific challenges and opportunities from the outset. Learning from Solve's network of innovators who have successfully navigated similar challenges would equip us with the insights needed to make informed decisions, adapt our approaches as necessary, and achieve a meaningful impact with our launches.

Heat Index Insurance for poultry is innovative on multiple fronts, addressing climate risk in agriculture through a novel approach that combines satellite technology, actuarial science, and local market understanding. This innovation lies not just in the technology itself but in how it's applied to solve a pressing problem—climate-induced heat stress in poultry, a sector traditionally underserved by insurance products. It's crucial to highlight that it is the first of its kind in the market, addressing a significant gap in the agricultural insurance landscape. Prior to this, the sector, especially the poultry industry faced by heat stress, had no affordable insurance product tailored to mitigate the financial risks of climate-induced temperature variations.

Innovative Aspects:

1. Satellite Data Utilization: Leveraging satellite technology for real-time weather data, IBISA's solution can accurately assess heat stress risks across vast geographic areas without the need for physical inspections. This approach significantly improves the scalability and efficiency of insurance product delivery, making it possible to serve remote and underserved regions.

2. Automated Payouts Based on Objective Indices: By using temperature thresholds as triggers for insurance claims, payouts are automated and objective, reducing the need for claim submissions and processing. This reduces administrative costs and time delays, ensuring that farmers receive timely financial support following heat stress events.

3. Tailored Insurance Products: Recognizing the diverse needs across the poultry industry, IBISA offers customizable insurance solutions. This flexibility ensures that both smallholder farmers and large commercial operations can access insurance products that align with their specific risk profiles and financial capacities.

4. Market and Landscape Change Potential:

   • Broader Access to Insurance: By addressing a specific yet common risk like heat stress, IBISA's product opens up the possibility of insurance for many poultry farmers who previously had no access to such financial protection mechanisms.
   • Encouragement of Resilience Practices: With financial risks mitigated, farmers are more likely to invest in heat stress mitigation measures, such as improved housing or water cooling systems, promoting more sustainable and resilient farming practices.
   • Catalyst for Innovation in Agriculture Insurance: The success of this product can inspire the development of other index-based insurance products tailored to different aspects of climate risk, potentially transforming the agricultural insurance landscape to be more inclusive and responsive to climate change.

5. Community and Industry Engagement: By working closely with local communities, agricultural associations, and insurance partners, IBISA ensures that its solution is grounded in the needs of its users. This engagement fosters trust and encourages the adoption of innovative solutions within the industry.

Heat Index Insurance product operates on a clear pathway from activities to long-term positive outcomes for the poultry farming community, particularly focusing on mitigating the impacts of climate-induced heat stress. The process follows a structured approach, linking our solution's implementation with its intended impacts.

Activities: The core activity involves deploying Heat Index Insurance using satellite technology to provide real-time data on temperature fluctuations. This activity is supported by partnerships with local insurers, engagement with farming communities for awareness, and customization of insurance products to meet the diverse needs of poultry farmers.

Immediate Outputs:

• Increased Insurance Coverage: Farmers gain access to affordable insurance against heat stress, a previously unaddressed risk.
• Awareness and Education: Increased awareness among farmers about the risks of heat stress and the availability of financial protection mechanisms.

Short-term Outcomes:

• Adoption of Insurance Products: A significant number of poultry farmers start using Heat Index Insurance, leading to financial protection against the loss of productivity due to heat stress.
• Behavioral Change: Farmers are more inclined to adopt sustainable farming practices, knowing they have financial backup during adverse weather conditions.

Long-term Outcomes:

• Economic Resilience: The financial stability of the farming community improves, with reduced income volatility due to climate risks.
• Sustainable Farming Practices: Encouraged by insurance support, farmers invest more in adaptive and resilient farming technologies, contributing to long-term sustainability.
• Market Transformation: The success of this product encourages the development of similar insurance products for other climate risks, broadening the market for agricultural insurance.

Evidence and Support:

• Third-party Research: Studies have shown that access to agricultural insurance increases farmers' willingness to invest in their farms and adopt more productive, yet riskier, farming practices because they have a safety net 
• Pilot Program Data: Our pilot in Andhra Pradesh demonstrated increased uptake of heat index insurance among poultry farmers, with insured farmers showing interest in further risk mitigation strategies.
• Feedback from Target Population: Interviews and surveys with participating farmers indicate a high level of satisfaction with the product and an increased sense of security, encouraging them to maintain or increase their poultry farming activities even in the face of rising temperatures.

Our impact goals are centered on enhancing the resilience of the poultry farming community to climate-induced risks, particularly heat stress, and fostering sustainable agricultural practices.To measure our progress towards these impact goals, we are employing specific indicators that reflect both the immediate effects of our solution on farmers' livelihoods and its broader implications for sustainability and resilience in agriculture.

Impact Goals and Measurement Indicators:

1. Increase in Economic Resilience among Poultry Farmers:
   - Indicator: Number of poultry farmers enrolled in the Heat Index Insurance program.
   - Indicator: Reduction in income volatility among insured farmers, as measured by changes in annual income variability.

2. Reduction in Losses Due to Heat Stress:
   - Indicator: Claims being paid compensates the losses

3. Expansion of the Insurance Product to New Markets:
   - Indicator: Number of regions or countries where the Heat Index Insurance product to be launched in next 2 years.
   - Indicator: Diversity of agricultural sectors beyond poultry that adopt similar index-based insurance products developed by IBISA.

4. Renewal 

 - Indicator: Number of farmers who renews this product in the upcoming years, which will indicate the customer acceptance of the product.

To ensure accuracy and relevance, these indicators are to be continuously monitored and evaluated. Data collection methods include direct surveys with enrolled farmers, analysis of satellite and weather data to assess risk exposure and claim rates, and financial analyses to gauge income stability among the insured population. Additionally, feedback from local partners and stakeholders provides qualitative insights into the product's impact and areas for improvement.

The core technology powering IBISA's Heat Index Insurance solution is a sophisticated blend of satellite remote sensing, data analytics, and efficiency in claims processing. This innovative combination allows us to provide affordable, accessible, and reliable insurance products tailored to the needs of the agricultural sector, particularly addressing the challenges posed by climate change.

Satellite Remote Sensing: At the heart of our solution is the use of advanced satellite technology to monitor weather conditions, specifically temperature, across vast geographic areas. This technology enables us to collect high-resolution data on temperature fluctuations that are crucial for assessing heat stress risks in poultry farming. The satellite data are sourced from reliable global databases, ensuring that our risk assessments are based on accurate and up-to-date information.

Data Analytics: Leveraging powerful data analytics, we process and analyze the satellite-derived temperature data to identify instances where the ambient temperature exceeds predetermined thresholds indicative of heat stress conditions. This analysis is foundational to our index-based insurance model, wherein payouts are automatically triggered based on objective criteria, eliminating the need for subjective assessment or manual claim filing. The analytics platform is designed to handle large datasets efficiently, ensuring that claims processing is both swift and accurate.

Within the data analytics component of our solution, a crucial aspect is the automated historical data modeling process. This process involves analyzing historical weather data, including temperature records, to identify the specific thresholds that indicate heat stress conditions for poultry. By determining these temperature thresholds based on past patterns and occurrences, we can accurately predict the risk of heat stress and structure our insurance products accordingly.

Historical Data Modeling and Product Development Automation:

• Automated Analysis: The system automatically analyzes historical weather data for various locations, identifying temperature thresholds that have historically led to heat stress in poultry. This automation allows for rapid and accurate risk assessment across different geographic regions.

• Product Customization: With this data, we can customize our insurance products to the specific risk profile of each location. This means that the insurance coverage is precisely tailored to the risks faced by farmers in that area, making it more relevant and effective.

• Scalability: The automation of product development is key to IBISA's ability to scale quickly. By automating the analysis and product customization process, we can design and offer insurance products for numerous locations within a shorter timeframe. This scalability is crucial for expanding our reach and impact, enabling us to support more farmers in more regions with tailored insurance solutions against climate risks.

1. Core Tech & Underwriting Team: Based out of our headquarters in Luxembourg, this team comprises 4 full-time members. Their primary focus is on the product design and underwriting process, tailoring the insurance product to specific locations and risks. 

2. Sales Team in India: Comprising 3 full-time members, the sales team is responsible for client acquisition and awareness creation in the Indian market. 

3. Project Manager: We have one full-time project manager who oversees policy issuance and manages relationships with insurance companies.

Our journey in developing climate risk insurance solutions began with a successful Heat Index Insurance pilot for the dairy sector last year. Motivated by this success and recognizing the underserved poultry sector's vulnerability to heat stress, we embarked on creating a tailored solution. After conducting market research to understand specific risks in poultry farming, we initiated the product design 6 months ago, culminating in the launch of a pilot project this summer. Our focused effort on mitigating financial losses from heat-induced stress in poultry has been a 6-month intensive journey of research, development, and stakeholder collaboration.

At IBISA, fostering diversity, equity, and inclusion (DEI) is central to our organizational culture and operational philosophy. Our commitment to DEI is reflected in the composition of our team and the actions we've taken to create a welcoming and inclusive environment.

1. Diverse Team Composition: Our team's diversity is a source of strength and innovation. With a total of 16 employees from 9 different countries, we embrace a wide range of cultural, social, and professional backgrounds. This global perspective enriches our approach to solving complex problems and reflects our commitment to addressing the needs of diverse communities we aim to serve.

2. Leadership Diversity: Our leadership team embodies our dedication to diversity and gender equity. Among our three co-founders, two are women, showcasing our commitment to empowering women in leadership roles within the technology and insurance sectors. This balance in leadership ensures that diverse perspectives inform our strategic decisions and product development processes.

3. Gender Balance: Our overall team composition further demonstrates our commitment to gender equity, with 7 of our 16 employees being women. This balance is crucial for fostering an inclusive workplace where everyone, regardless of gender, has equal opportunities for contribution and advancement.

Goals for Enhancing DEI:

• We are actively working to further diversify our team, particularly by recruiting from underrepresented groups in tech and insurance. This includes targeted outreach to communities that have historically faced barriers to entry in these fields.
• Enhancing our DEI training and development programs for all staff to deepen our understanding and practice of inclusion, addressing unconscious bias, and fostering a culture of belonging.

Actions Taken:

• Implementation of equitable hiring practices, such as structured interviews and diverse hiring panels, to minimize bias in recruitment.
• Creating flexible work policies that accommodate different needs and lifestyles, acknowledging the diverse circumstances of our team members.
• Establishing forums and channels for employees to share their experiences and contribute to ongoing discussions on diversity, equity, and inclusion, ensuring that all voices are heard and valued.

Our business model for the heat index insurance product targeting the poultry sector integrates innovative financial solutions with cutting-edge technology to mitigate the financial risks associated with temperature-induced heat stress on poultry farms. This model is meticulously designed to offer comprehensive protection to poultry farmers, from small-scale to commercial operators, against the adverse effects of extreme heat conditions on productivity and poultry mortality.

Key Customers and Beneficiaries

 Poultry Farmers: They are at the heart of our model, facing fluctuating climate conditions that pose significant financial risks, particularly from heat stress impacting their poultry.

Products and Services

Heat Index Insurance for Poultry: Utilizing satellite data for ambient temperature monitoring, our product automatically compensates farmers when temperatures exceed safe thresholds, ensuring rapid response without the need for traditional claim filing.

Delivery Mechanism
Technology-Driven: By harnessing satellite technology and data analytics, we achieve precise monitoring and automated payouts, enhancing efficiency and transparency.
Community Engagement: Our direct ties with poultry associations and cooperatives help disseminate knowledge of our product, encouraging adoption and integration into farmers' risk management strategies.

 Value Proposition
Financial Safeguard: We offer a critical financial buffer against climate risks, stabilizing incomes and supporting the continuity of poultry farming operations amidst environmental uncertainties.

Strategic Approaches

-B2B and B2B2C Outreach: Given our startup nature, we prioritize partnerships for client acquisition, leveraging relationships with local insurers and cooperatives for broader access without extensive on-the-ground resources.
Collaboration with Insurers:Our innovative products are underwritten by local insurance companies, which issue policies and assume the associated risks. Our revenue is augmented through fees from these insurers, recognizing our role in business seeding and product innovation.

Impact
Our solution not only safeguards farmers against immediate losses but also fosters a more resilient and sustainable poultry industry. By enabling farmers to manage climate-related risks effectively, we contribute to the sector's overall durability and productivity.

Our strategy for achieving financial sustainability revolves around a combination of revenue generation from our innovative insurance products, strategic partnerships, and capital infusion through investment rounds. This multifaceted approach ensures a solid foundation for our operations, expansion, and the continuous development of impactful solutions for the agriculture sector.

 Recent Funding and Future Plans
Pre-Series A Funding Round: We've successfully closed a pre-series A funding round, a significant milestone that bolsters our financial resources. This capital will be pivotal in enhancing our product awareness and customer acquisition strategies, potentially including team expansion to bolster our sales pipeline and market penetration efforts.

Evidence of Financial Success
Dairy Heat Index Product Success: Our dairy heat index product launched last year stands as a testament to our financial strategy's success. Having insured over 100,000 cattle this year, the product's triumph underscores the effectiveness of addressing specific market needs with affordable solutions. This success story not only demonstrates our capability to generate revenue but also solidifies our market position and credibility.
Market Validation: The success of our dairy heat index product, marked by significant uptake and insurance coverage, validates our market approach and product design philosophy. It illustrates the demand for specialized, need-based insurance products within the agricultural sector, highlighting the potential for our poultry heat index product.