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ABSTRACT
The recent trajectory of micro-insurance in Africa lies at the intersection of two trends that have been percolating unevenly over the past decades: (1) the incorporation of micro-insurance into the practices of FinTech; and (2) the reframing of micro-insurance as a technology relevant to the management of ‘climate risk.’ I focus on digital experiments in the construction of platforms which access data from remote sensing ‘earth observation’ technologies to formulate unique indices of climate risk. These platforms mediate the antinomies of presence/absence, place/distance; they operate ‘remotely’ from the risks they constitute and map while claiming an intimate and ‘hyper-local’ index of those risks. These mediations manage the distance between ‘the ground’ and the ‘remote’ sites from which knowledge of particular locations is produced, constituting new forms of territory and volume. I argue that these platforms entail unique uncertainties of their own: the ongoing problems of basis risk; costs imposed on vulnerable populations often unable to afford premiums; and issues of climate injustice in which responsibility is placed on poor populations to manage climate risks they had little role in creating in the first place.
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No potential conflict of interest was reported by the author(s).
Notes
1 Commentators argue that ‘insurance products can help the poor to absorb shocks and anticipate the impact of public and private sector-led transition activities’ (Pasricha and Baur-Yazbeck Citation2020, p. 2).
2 I am grateful to an anonymous reviewer for pointing out the longer genealogy of the protection gap as an idea which has been consolidating over a the past 20 years. see, for example, Holzheu et al. (Citation2015).
3 Knudson (Citation2018) assesses a weather index insurance product in St. Lucia active since 2013 as a kind of precursor to the later consolidation of index insurance post-2015.
4 Africa’s insurance penetration is concentrated in South Africa, Namibia, Morocco and Zimbabwe and, to a lesser extent, Kenya and Tunisia. (Strebel Citation2019).
5 Massingham and Malia (Citation2021) note ‘that 30 of the world’s 40 most climate-vulnerable countries are in sub-Saharan Africa … .[while] only 3% of global climate finance finds its way to Africa.’
6 Isakson (Citation2015, p. 271) notes, simply, that ‘many projects have been disappointing.’
7 Put simply, ‘digital and mobile technologies can go a long way in addressing protection gaps.’ (Schanz Citation2018, p. 32; see also Pelayo-Romero Citation2019).
8 There are now 3 ongoing sovereign/regional risk pooling mechanisms which deploy parametric techniques: the Caribbean Catastrophe Risk Insurance Facility, the African Risk Capacity Initiative, and the the Pacific Risk Assessment and Financial Initiative. (See Broberg Citation2020). For details of the African Risk Capacity Initiatives see African Risk Capacity (Citation2020).
9 This is echoed By Bille (Citation2020, p. 9) who notes: ‘With the Earth plumbed at increasing depths and resolutions … .[new technologies have emerged which have] complicated the relationship between the surface and the subsoil.’
10 The ‘necessary distance’ reference comes from Eyres (Citation2017, p. 3): ‘the ability to view the earth as a totality … Earth observation provides us with the necessary distance to get a clearer view of things, to see the Earth as a whole.’
11 This table is designed not as an exhaustive inventory of remote sensing insurance platforms but as a sample of the diverse forms that those platforms now take.
12 Similarly Bennett argues (Citation2020, p. 2) that ‘satellite imagery acquires its power from its perceived ability to capture all of Earthly reality’ despite the ways in which it assembles particular images and data in very specific kinds of ways. A similar concern is raised by Bennett et al. (Citation2022, pp. 743–744) who note that ‘presumptions of its hegemonic, undifferentiated, and objective gaze may merit reconsideration’ of remote sensing in a methodological effort ‘to humble and de-universalize the technology, exposing is inescapably earthly origins and its entanglements with particular social, political and technical conditions and power relations.’
13 The pursuit of remotely-sensed soil moisture measures is constantly in flux. A recent key innovation includes the ‘Soil Moisture Active Passive (SMAP) satellite mission … dedicated to obtaining surface soil moisture observations … launched in 2015 by NASA … to utilize the respective advantages offered by using both passive and active sensors in retrieving soil moisture … with high spatial an temporal resolution.’ (Karthikeyan Citation2017, pp. 239–240).
14 ‘Active microwave sensors … can provide much higher spatial resolution but with more challenges in the retrieval of social moisture.’ (Peng et al. Citation2021, p. 2).
15 This involves ‘scatterometers and radars which measure the radar backscattering coefficient … and radiometers which measure the brightness temperature … [first of which] are active because they use their own source of electromagnetic energy for the measurement, while … [the others] are referred to as passive instruments because they measure energy that is reflected or emitted from the earth surface.’ (Van Der Shcalie et al. Citation2021, p. 5).
16 VanderSat, an ‘Earth Observation’ partner of the CCI, operates as ‘the independent calculation agent delivering unique satellite Index Insurance services to (re) insurance firms.’ (Arntz Citation2021, p. 23).
17 This language of remainder comes from both Johnson (Citation2021b) and Anthropologist Jane Guyer who has asked: ‘What is ‘risk’ as a transacted ‘thing’?’ In answering this question, Guyer reminds us that financial transactions have ‘remainders’ that are not always settled and harms which cannot be easily redressed. As she notes, ‘since mitigation can only ever be partial, where is the excess located?’ (Guyer Citation2009, p. 215).
18 As Aguiton (Citation2019, pp. 282–284) argues, micro-insurance entails ‘fragile contours’: ‘risks do not circulate as manufactured products on an assembly line … .[they are] ‘very fragile, not properly established. Risks do not circulate smoothly.’
19 My analysis is indebted to the larger structural analysis presented in various recent papers by Nick Bernards (Citation2018, Citation2019, Citation2020).
20 Some argue that index insurance offers a unique perspective capable of identifying conditions not only for asset replacement but also for (pro-active) practices of asset protection. (Vrieling Citation2015) The work of the International Livestock Research Institute, for example, has navigated drought conditions for 20 million pastoralists in the Horn of Africa using the Normalized Differenced Vegetation Index. This approach ‘pays out when forage scarcity is produced to cause livestock deaths in an area. (Vrieling Citation2015, p. 97). This entails ‘intervention prior to mortality,’ and ‘payout at the beginning of the dry season rather than the end.’ (Vrieling Citation2015, p. 99).
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Rob Aitken
Rob Aitken is a Professor in the Department of Political Science at the University of Alberta in Edmonton, Canada. His work lies at the intersection of cultural economy, the social studies of finance and governmentality studies. His most recent book, Fringe Finance, was published in 2015. His current research focuses on the imperial histories of insurance, the financializaiton of climate change and the contemporary relationship between financial value and waste. His work has appeared in Global Society, Review of International Studies, Millennium, Competition and Change, New Political Economy and Development and Change.