Agricultural insurance is critical for the economic stability of South Asia and ASEAN, where agriculture employs a substantial portion of the population. However, these regions face unique challenges, including extreme weather variability, limited digital infrastructure, and low insurance penetration among smallholder farmers. Climate-related risks such as floods, droughts, and cyclones threaten agricultural productivity and incomes, putting immense pressure on farming communities. Despite these risks, insurance coverage remains low, primarily due to limited awareness, financial literacy, and a lack of tailored products that fit the needs of rural smallholders. Additionally, many rural areas still struggle with inadequate digital connectivity and financial services, which hampers access to both information and insurance products.

Digitization offers a transformative approach to overcome these challenges, making agricultural insurance more accessible, affordable, and adaptable. Digital education platforms can raise awareness and build trust by providing insurance information in local languages and formats suited to farmers’ needs. Technologies such as satellite imaging, IoT sensors, and AI-powered analytics reduce costs by streamlining data collection and automating claims processes. Additionally, data-driven insights allow insurers to offer products tailored to specific crop types, local climate conditions, and farmer income cycles, creating relevance and affordability. By leveraging digitization, agricultural insurance in South Asia and ASEAN can better protect farmers against climate risks, bolstering resilience and promoting economic stability.

Agriculture in South Asia and ASEAN

ASEAN has been recognized as one of the major agricultural producers in the world. The region produced 195.5 million tons of rice, 44.7 million tons of corn, and 82.1 million tons of cassava as its agricultural output in 2022. It is expected that in 2023, with an increase of 0.95%, rice production will reach 202.34 million tons.

Forecast of catering factors in 2024 shows that rice exports along with domestic consumption and the self-sufficiency ratio shall also improve. After facing two years of low rice stock, exports are expected to reach at 8 million tons, while domestic utilization will increase from 113.94 million tons in 2023 up to 115.82 million tons in 2024.

In South Asia, about 65 % of the population, including most of the poor people, lives in the countryside, where agriculture is prevalent. This area has the largest number of jobs (42%), making it the largest employment sector in the region, contributing 18% to the regional GDP (World Bank, 2021). Studies have confirmed that climatic changes have adversely affected agricultural crop production in some Asian countries.

Agricultural Insurance in the region

Nevertheless, agricultural insurance is not widespread in these regions. It is mostly due to barriers such as soaring operational costs, limited awareness and few insurance products aligned to local needs. This is where digitization could fill the gaps — leveraging mobile platforms, remote sensing and data-driven models to make agricultural insurance products more accessible to farmers who live in remote locations.

The Level of Awareness and Low Financial Literacy:

In many areas, farmers are either not literate in agricultural insurance or do not grasp the benefits it can bring in reducing financial risk. Information and trust in the formal financial system also tend to be lacking due to low literacy rates. To do this, the digital platforms can achieve major significance through information diffusion and education toward those players.

Limited Product Relevance:

Most available products are not specific to crop types, weather conditions, or income patterns in these regions; that is why insurance sector is not able to capture the interest of smallholders.

Underwriting, data collection, and claims processing can be expensive, especially in remote rural areas where populations are dispersed and these may even feature challenging terrains. Satellite data and AI as digital solutions could cut such costs substantially for insurers to reach out to more farmers at lower operational expenses.

1. Enhancing Awareness through Digital Outreach and Education Using digital media and platforms to increase outreach and education for creating awareness.

Localized Mobile Education Platforms

Mobile based platforms can be used to provide multilingual, easy to understand content about agricultural insurance in the hands of farmers. Interactive training and simulations can help farmers understand insurance and build trust.

Leveraging Social Media and IVR

Social media and IVR (Interactive Voice Response) services can be utilized to reach farmers in remote areas with low literacy, using audio as a medium for providing education. For instance, in Bangladesh, IVR services have been employed to reach out to more than a million farmers and provide them important information about the crop cycle and weather forecast.

mFarmer: Case Study

mFarmer is a digital platform in India that gives farmers access to insurance awareness through multilingual app interfaces. It also sends SMS updates on crop cycles, weather alerts, and insurance premium notifications so farmers can stay in the know.

2. Reducing Costs via Remote Sensing and Digital Claims Processing

Remote sensing and aerial imaging

Satellite-based remote sensing can be used to provide data on rainfall patterns, crop growth stages, and potential pest infestations, etc.

Drones can perform more localized assessments, particularly useful for small, scattered plots.

AI-Powered Claims Processing

Integrate machine learning models to assess damage through satellite data and automate claims based on predefined weather or yield indices, reducing manual assessments and associated costs.

Pradhan Mantri Fasal Bima Yojana (PMFBY) in India

India’s PMFBY has begun to integrate AI and remote sensing, using satellite data to track crop conditions and predict yield, allowing quicker payouts and reduced fraud.

3. Product Customization through Data-Driven, Index-Based Insurance Models

Weather Index-Based Products

Developing weather-based index insurance, which can provide coverage based on rainfall, temperature, etc. This customization ensures relevance for local crops and allows quick, relevant claims processing based on weather data.

Dynamic Product Adjustments Using Regional Data

Creating data analytics platforms that continuously collect data on regional farming patterns, historical weather data, and local soil types to provide dynamic premium adjustments and tailored coverage.

Rice Crop Insurance in Vietnam

Vietnam’s rice crop insurance model utilizes satellite data to monitor weather and pest risks specific to the Mekong Delta, supporting yield and revenue-based insurance models. This project is part of Remote Sensing-based Information and Insurance for Crops in Emerging Economies (RIICE).

1. Payment Platform for Premium Collection

The use of mobile payment solutions like GCash in the Philippines allows low-income farmers to pay premiums in small, regular installments.

2. Use of Blockchain Technology for Transparent Transactions

Blockchain technology can be used to promote secure financial transactions and automate the claims process. This enhances trust in insurance processes among farmers and improves record-keeping for insurers.

This summarizes how the technology implementation in the insurance sector will help insurance to penetrate remote areas in the concerned regions for the good of the agricultural community.

1. PULA

Pula is an Insurtech company that designs and sells agricultural insurance products to smallholder farmers. Pula's flagship product bundle combines insurance with bespoke farming support on agronomy, climate resilience, and structured inputs to derisk and increase the input efficiency of the 40 m+ smallholder farmers in Africa. Since its first sale in November 2016, Pula has worked across ten countries in Africa (partnering with governments, microfinance institutions, and agribusinesses) as well as two countries in Asia. In total, it has insured around 1.3 million unique farmers.

2. (Micro)Insurance

Agricultural insurance: Access to agricultural insurance helps farmers manage risks and grow their businesses. This agricultural insurance company utilizes satellite data and mobile platforms to distribute micro-insurance products. The approach has shown promising results in Kenya and Indonesia, with potential for expansion across different crops and regions.

Microinsurance: Vulnerable groups living in poverty are often not targeted by traditional insurers, who deem them unprofitable due to high overheads relative to the low premiums paid by these individuals. This platform works with suppliers of basic services like energy, water, health, agriculture, etc., who reach millions of households around the world but have limited capacity or lack resources to include an appropriate supply of risk management solutions1 for their customer base.

Piloted in Bangladesh and Nepal, IBLI utilizes satellite data to monitor the risk of drought and trigger payments for livestock insurance for farmers. It has shown potential scalability and relevance to agricultural insurance in South Asia, given its diverse crop patterns.

Public-Private Partnerships (PPP)

Collaboration of governments and local financial institutions is crucial to help spread digital infrastructure as well as adoption over wider geographical areas.

Policy making for digital insurance

Encourage regional governments in developing regions to develop policies that promote digital insurance, provide subsidies to pay for premiums, and establish the legal environment for digital claims and blockchain.

Digital Literacy and Capacity Building Programs

For long term adoption, literacy programs should be recommended, and they should focus on digital tools as well as agricultural insurance concepts for smallholder farmers.

Challenges and risks in implementing digital solutions

Digital literacy gap is a challenge. Many people are not aware of or have experience with modern technology, especially in rural areas or among those who are underserved. Data privacy as a risk is an issue to be addressed. Lack of internet connectivity, especially in remote locations where infrastructure is not developed at all can be another big issue.

In order to insure the above challenges, it is better if we do a phased approach for deployment ensuring relevant training and support being provided to the users. Engage the stakeholders as early as possible, this will help come up with more effective solution and ease integration thus lesser disruption.

Digital Literacy: According to the International Telecommunication Union (ITU) around 2.9 billion people or half of world population, are offline, with the majority living in developing regions where access is prevented due to high infrastructure costs, availability and affordability of equipment, lack of content in non-English local languages and lack of skills.

Data Privacy Concerns: A report by World Economic Forum indicated that 57% percent of consumers globally were worried about data privacy when using digital applications and risking personal data breach was their biggest worry.

Internet Connectivity: According to The World Bank, approximately 60% of the global population still lacks Internet access and there is a significant digital divide between urban and rural areas especially in regions such as South Asia and Sub-Saharan Africa.

AccelTree’s products suite comprising of AcceLife, AccelRemote, AccelSign, Quotation Engine, Configurator, AccelWritR and Gamification Module (APL) can help in addressing the challenges within agricultural insurance through increased digital reachability, operational effectiveness and product flexibility. The details of how each product helps in creating a holistic solution for digitization of agricultural insurance is provided below.

Building Awareness and Outreach with AcceLife and Gamification Module
AcceLife can also be customized as a front-line platform for onboarding and educating, where farmers or their agents can directly access detailed, simplified information about insurance products through a mobile application.

Multilingual Educational Modules: AcceLife can provide multilingual content that demystifies agricultural insurance, how premiums work, how to make claims, and what policyholders are entitled to.

Gamification through APL: The Gamification Module (APL) could engage farmers by enabling incentives and interactive components associated with learning about insurance. For example, the completion of short learning modules could provide farmers with discounts on premiums or points for redemption of other resources. This interactive approach meets the awareness need and stimulates active participation in insurance literacy.

Cost Efficiency through AccelRemote and AccelSIgn:
Operational costs in rural areas are one of the biggest barriers to scaling agricultural insurance. AccelRemote and AccelSign make it easy by enabling remote interactions & approvals.

Remote Collaboration for Claims Assessment: Insurance agents can collaborate remotely with the farmers by making use of AccelRemote to obtain information about the crops, assess damages, and also get claims registered, without being physically present. It is a real-time video inspection tool that facilitates remote inspections of crops using visuals provided by the farmer.

Paperless and Secure Signing with AccelSign: Applications, as well as claims for policies, can be digitally signed using AccelSign. It saves time and costs associated with the physical handling of documents. Low-income farmers, especially, are ensured immediate and secure documentation.

Customization and Scalability through Configurator, AccelWritR, and AcceLife
Insurance products, very often, come without customization options that would accommodate the manufacturers who belong to different farming communities across South Asia and ASEAN. Configurator, AccelWritR, and AcceLife improve product design and pricing are dealt with precision and flexibility by these technologies.

Product Customization with Configurator: Insurers, using Configurator, can make policies similar to regional crops, climate conditions, and risk factors etc. The tool helps insurers offer personalized coverage for rice farmers in Ethiopia or banana growers in India leading to better relevance and attraction of insurance products.

AcceLife for Real-Time Premium Calculation: By means of the AcceLife, insurers can use the integration of real-time premium calculations in product development. It could be based on the regional data, weather forecasts, and crop yield projections. Insurers, through quick and accurate price offerings, can propose flexible premium adjustments that correspond to the farmers' membership categories and also their irregular seasonal incomes.

AccelWritR for Enhanced Underwriting: AccelWritR is the underwriting intelligent engine when it comes to processing disparate data, which even includes satellite imagery, historical yield data, as well as weather patterns. Using these inputs, AccelWritR allows insurers to set risk parameters accurately through intense analytics and automate claims processing, thereby reducing manual assessments and ensuring fair, data-backed payouts.

Building Trust and Retention Through Digital Collaboration and Analytics
Digital Collaboration and Analytics as a Way to Build Trust and Retention In addition to the main obstacles, gaining the trust of and maintaining the relationship with customers in rural markets of insurance is the main thing.

Agent and Farmer Collaboration with AccelRemote: AccelRemote offers the opportunity for the direct and continuous support of policyholders. Farmers can reach out to their agents and insurers for follow-up assistance, while, on the other hand, the agent can give regular insights as well as insurance updates, which make a relationship of trust and transparency.

Incentivization and Retention of APL and APL Analytics: AccelTree uses the Gamification Module (APL) together with an integrated analytics engine, insurers can make customers stay with them by using milestone-based rewards, renewals, and incentivized referrals. Data analytics could measure participation levels, usage patterns, and engagement effectiveness which would be provided to insurers to customize further their offering.

AccelTree's products that are integrated into the agriculture insurance framework create a digital ecosystem that can handle the unique South Asia and ASEAN challenges. Through tailor-made education, streamlined operations, customizable products, and continuous engagement, AccelTree’s solutions pave the way towards an all-around, effective, and expandable approach to agricultural insurance in development markets.

Digitization and automation of insurance processes have potential to potential to revolutionize agricultural insurance especially in the remote, under covered regions of South Asia and Asean. Making Agricultural insurance more affordable is possible through innovation and process optimization through digital channels and the adoption of new technology in the sector.