My Pula journey: Launching progressive agricultural insurance in Pakistan
I had a steeper learning curve than most when I joined Pula Advisors. I knew little about insurance or agronomy, African and Asian geography. Though I consider myself well-travelled, I’d never been to sub-Saharan Africa. I don’t consider myself particularly tech-savvy. I still use an iPhone 8. I refuse to upgrade until I either lose my phone or my five-year old phone stops working.
Spending the majority of my career in the philanthropic sector did give me a few advantages. I’d seen firsthand the challenges faced by smallholder farmers: the cycle of poverty both caused and exacerbated by factors largely outside of their control; their children leaving the countryside — not for great opportunities in the cities, but to escape the lack of opportunity in rural areas. And the countless negative consequences that can arise from that precarious journey.
Farming is unattractive at best and a risky business. At the beginning of the season, farmers typically borrow money to buy inputs like seed, fertiliser and pesticides. Every so often, their investments and their labour can be wiped out in a single flash flood or locust infestation, through plant diseases, or viral attacks. Such climatic events have increased in frequency and severity in our lifetime. When harvests fail, farmers are forced to dip into their savings or sell off livestock to pay back debts. When that’s not enough, they borrow at far higher rates from informal lenders. Far too often, they may be compelled to pull their kids out of school, usually daughters first.
This devastation is not only common at the individual level; similar stories from across the developing world are rife, especially from countries most dependent on the agricultural sector for their livelihoods.
Beyond the accolades and the associations with the World Food Programme, IFAD, and the Bill and Melinda Gates Foundation, Pula has a simple value proposition: to transfer the climate risks affecting food production away from the smallholder farmer and placing it with professional risk-takers, i.e., the insurance sector. We aim to achieve a fine balance where value is created for all stakeholders. This includes governments, credit facilities, or any other institution that supports farmers, the local and global risk-takers, and most importantly, the farmers themselves.
Only when everyone wins is the solution viable. To be sustainable, a solution must be commercially driven, and usually launched with direct and indirect government support. This is hard work, and there are few success cases. Our recent work in Pakistan is a good example.
After 18 months of negotiations, we finally closed our first pilot in Pakistan, with two leading commercial banks — Habib Bank (HBL), the largest private sector bank, and Bank of Punjab, the best-performing public sector bank — and TPL Insurance, a progressive local insurer. Each partner agreed to subsidise a small group of farmers to be the first in Pakistan to launch the Pula product. Our insurance product offers far more comprehensive cover than existing schemes, with a higher payout ceiling if a calamity hits at 70% of the value of underlying, as opposed to the current 3%.
Our pilot would not have been possible without the support of Bill and Melinda Gates Foundation, which also supported our feasibility study for Pakistan last year. Pakistan Agricultural Coalition (PAC) has been an important partner too, led by World Bank consultant Kazim Saeed and former Punjab Department of Agriculture Secretary Arif Nadeem, whom I’ve worked closely with over most of my tenure at Pula. The banks and insurers trusted PAC, and PAC trusted Pula. After all, Pula has provided climate insurance cover to over five million smallholder farmers across Africa and Asia.
Last month, I finally travelled to Pakistan and met the people I’d been talking to over video calls and e-mail. During the trip, I got to meet many others including multiple government agencies, banks, insurers, microfinance institutions. Not only was this my first trip to Pakistan, but it was also the first time I had travelled to a Muslim-majority country for work.
Before travelling, I sought advice over appropriate business attire. “Pakistani women do not have knees”, joked one of our partners. When I arrived, I observed that both women and men covered all of their legs (not just knees) and most of their arms, with only hands and feet showing. I decided not to wear the long-sleeved, knee-covering dresses that would be appropriate in most other countries, but which suddenly felt unfitting.
“You should wear whatever you feel comfortable in”, advised the one woman I knew prior to arrival. “Sometimes I also wear jeans to the office.” I wasn’t expecting that same woman who gave me this advice to show up to the meeting in a burka.
I was chaperoned everywhere I went. When I asked the hotel reception for directions to the minimart, the highly irritated staff suggested I hire a rental car (for the 800-metre journey).
This level of protection felt like overkill. Although it was my first time in a new country, I’d travelled solo for most of my career and considered myself careful enough. My general rule of thumb is not to stare, walk swiftly and intently with a clear destination in mind, and a bit of cash in pocket. So, on the one day that I had to myself, I did something cheeky: I left the hotel by myself on a Sunday afternoon and walked to a nearby hotel to have something other than my own hotel’s lunch offering.
That mini-adventure passed without incident; there were fewer than a handful of people along the way, tuk-tuk drivers and others loitering around in small groups. They definitely noticed a speedwalking foreign woman rushing past them, but I didn’t understand what they were saying, if they were even speaking to or about me. In the end, going to the other hotel was worthwhile to confirm that it wasn’t really worth the fuss, and I went back to dutifully ordering room service for the rest of my stay.
Pakistani food is delicious, similar to northern Indian cuisine with slight variance in the breads and curries. Wine or beer isn’t on the menu, so you wash it down with lassi — a yoghurt-based drink — or a soda. I’m looking forward to my next trip, not just for the excellent food, but also to see our operations grow and insure more farmers.
Over the coming years, we hope to bring comprehensive insurance to millions of Pakistani farmers. As one of the world’s most populous nations with a third of its labour force working as farmers, most are currently uninsured. Reflecting on this trip, as well as the rest of my Pula journey makes me grateful to be a part of this exciting, ambitious venture: to protect farmers from climate perils, and give them a layer of protection through insurance, and dignity in their livelihoods.
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