InsurTech company OKO Finance is using satellite and mobile technologies to bring crop insurance to emerging markets. OKO uses satellite information to define the risk and create insurance products for farmers in emerging markets. These products are then distributed using mobile technologies. These also enable the collection of premiums and payment of claims. OKO aims to secure the income of 2 Billion people at the bottom of the pyramid by providing insurance companies with the opportunity to serve a new customer segment. Using mobile as a key channel of distribution and payment enables the unbanked to access this key financial service.
TechMoran spoke to OKO about their company and its vision to delocalize insurance services.

Tell us about yourselves; your team, your educational and professional backgrounds, and your journey with Oko Finance so far
The two co-founders are Simon Schwall and Shehzad Lokhandwalla.
Simon Schwall is a French national who studied business management in Paris and Singapore. 4 years at an an innovative insurance company gave him one goal: to bring life insurance to Papua New Guinea, a country where most people don’t have a bank account and had never heard of insurance before. However, everyone owns a mobile phone. Simon partnered with a mobile operator and offered their customers life insurance to be paid for monthly using their phone credit. It was successful and became the most popular life insurance in the country with up to 350,000 active policies after 18 months.
He then realized that majority of their customers were farmers, and were exposed to losing most of their income in case of adverse weather and thought: “Why not use our mobile distribution system for crop insurance?” At this point he left the company to launch OKO in 2017.

Shehzad is an Indian national who studied computer science in California. He always liked the idea of using technology to help people in need. He has previously worked in schools in South-East Asia, and for global development organizations in Geneva, before deciding to join an innovative micro-loan provider in East Africa, that specializes in farming. There he developed applications for farmers to help them access finance, choose their input and access relevant advice. This gave him a taste for entrepreneurship and when he found out about OKO, he decided he wanted to be part of the adventure.

How would you best describe Oko Finance briefly, what does it do?
OKO secures the income of farmers through affordable and accessible insurance products. Our insurance products are fully automated and claims are paid when we identify adverse weather by satellite. We use mobile distribution to offer a paperless and simple process, and serve customers even when they are unbanked.

What market gap did you spot that motivated you to start this company?
A immense part of the population in emerging countries live off agriculture, and they are dependent on the weather for their income. This means that they are at risk of losing everything each season. On top of that, they are excluded from basic financial tools because of their unstable source of income. Yet, today, weather data and satellite imagery is available at a very low cost with high precision. We identifies that this was an opportunity to bring a new innovative product useful to many.
We are not the first to think this way and a few companies in Kenya are already profitable with similar models, so the timing is right to improve on this model and bring it to new geographies.

Who is your target market?
We aim at all markets where agriculture is a main occupation and where mobile payment is available. For now we launched in Mali where we have already paying customers who are insured. But we are also in discussion with partners in Ivory Coast, in Cambodia and in Pakistan. There are many countries that match these criteria.

How does your company make money?
We take a commission out of every payment we collect. We are an insurance broker, and that is a very common model.

Who would you say is your major competition in this space at the moment?
In most countries, there is not direct competition, and farmers just invest in life stock after a good season, which they can sell after a bad season. But this is far from ideal as everyone sells their life stock at the same time and the value is dragged down.
In some countries there are competition insurance solution: in Kenya for example there are two for-profit companies in this space. And in Zambia traditional insurers have been innovative in their approach. But the market is big enough for more players.

What is your vision for the company in the next 5 years? What is your plan for expansion? Any new products coming soon?
We plan on launching in multiple markets in the next 5 years. In Africa but also in South Asia, in South-East Asia, in the Middle-East and maybe in Latin America. The rise of smartphones will also allow us to improve the customer experience, and we are spending a lot of resources in developing insurance that don’t only cover from weather risks but also pests and diseases.

At the moment, how do you measure your own success? What are your metrics?
Our key metrics are the number of customers registered to our platform, and how many of them effectively pay.

What advice would you give to upcoming entrepreneurs?
There is a lot of information available freely today. And more often than not there are alternative ways to use this information to create new services. You can find great opportunities to change traditional industries if you think out of the box and use the wealth of information that surrounds us.