Joan Lamm-Tennant, Chief Executive Officer of Blue Marble.

“Growing this program has been a collaborative effort,” said Joan Lamm-Tennant, Chief Executive Officer of Blue Marble. “We are grateful for the support of our partners, including Nespresso, Caféxport and Seguros Bolivar. Together, we are reducing vulnerabilities in the lives of smallholder farmers.”

The CaféSeguro program provides specialty insurance coverage for severe rainfall and drought during the coffee harvest’s developmental stages when it is most vulnerable to weather shocks. Blue Marble launched this program in August 2018 in partnership with Nespresso, a vendor of pre-portioned, single-serve coffee. Through this program, Blue Marble serves about 3,275 smallholder farmers, representing a 46 percent increase since last year. Thanks to new government subsidies for crop insurance, smallholder farmers have seen their insurance coverage triple and their costs decrease substantially.

Blue Marble had a 100 percent renewal rate among existing cooperatives and added a new cooperative, Alto Occidente, to the program. In its first year, CaféSeguro protected 2,250 farmers belonging to the Aguadas, Norte de Caldas and Andes coffee cooperatives in Caldas, Colombia. The majority of the farmers received insurance payouts in the first year after a severe drought affected their crops.

CaféSeguro is important to our coffee farmers because it protects them against adverse weather events,” said Cesar Julio Díaz, President of the Aguadas, Norte de Caldas and Alto Occidente cooperatives. “It guarantees their continual agricultural activity while improving their livelihoods.” Blue Marble will continue to expand the CaféSeguro program in Colombia through the coffee cooperative model. It will also explore new business models to serve additional smallholder farmers, while advancing plans to scale the program to other crops and countries.

Blue Marble is owned by several industry investors, including AIG, Zurich, OldMutual, Marsh & McClennan, Hamilton, and other insurers.

Above photo of a coffee plant growing streetside in Medellín, Colombia © Loren Moss

The policies are designed for small farms that are particularly vulnerable to weather fluctuations, price drops, low yields, and crop blight. The marketplace currently does “not always provide these farmers with the necessary risk transfer mechanisms for their long-term security,” according to Blue Marble Microinsurance.

The New York-based consortium, which is comprised of eight companies, believes that its microinsurance solutions can be particularly useful for farmers looking to mitigate supply chain risk and protect their investments.

Along with Nespresso, a company that has a long history in Colombia and relationships with more than 70,000 coffee farmers across the world, Blue Marble also hopes that the pilot program will prove successful enough to encourage other stakeholders to participate in the initiative.

“Together, we are driving collaborative innovation across industry sectors, bundling insurance into the existing value chain of the underserved,” said Joan Lamm-Tennant, chief executive officer of Blue Marble Microinsurance.

Nespresso USA President Guillaume Le Cunf said that his company “is committed to improving the lives of farmers who work with us to source the highest-quality, sustainable coffee in the world” while helping to offer “innovative solutions that aim to mitigate risk and create value for coffee farmers.”