ClimaCash+: How VisionFund and IBISA are looking to transform climate insurance

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ClimaCash+: How VisionFund and IBISA are looking to transform climate insurance

In 2024, VisionFund International (VFI) and IBISA launched ClimaCash+ – a product designed to offer simple, fast and relevant payouts to communities impacted by climate shocks. This joint initiative was based on a shared vision to make climate protection mainstream, and was encouraged by the success of hospi-cash insurance models. The first pilot started in March 2025 in Kenya in partnership with APA, a local insurer ready to take this innovation on board. Launching ClimaCash+ was driven by the growing vulnerability of low-income communities served by VisionFund to climate-related disasters. In recent years, these have intensified due to the impact of climate change: 2023 was confirmed as the warmest year since 1850.

Uniquely, ClimaCash+ comprises a suite of four parametric climate insurance products designed to respond quickly even before a disaster happens. These include RainCash, DroughtCash, FloodCash and HeatCash. Each one is designed to provide rapid cash assistance when a specific weather trigger is met. For example, if rainfall in an eligible area is above a certain level, RainCash would pay out automatically to the affected user. ClimaCash+ is embedded in VisionFund loans to cover all borrowers and requires small premiums to be paid along with regular loan repayments.

The first phase involves testing the product in Kenya

The product was first launched in Kenya in March 2025 in partnership with APA, with RainCash being piloted across five VisionFund branches: Eldoret, Meru, Narok, Nyandarua and Nyahururu. Borrowers are enrolled in ClimaCash+ by default, on an opt-out basis, and can top up to increase their level of cover. The pilot aims to test the product during the rainy season across limited locations for three points. After an evaluation, improvements may be made in time for Kenya’s second rainy season (usually in November each year).

Box 1: The rationale behind the pilot locations

Eldoret, in the Western highlands, experiences significant rainfall between May and August. Flooding in this region affects both agriculture and infrastructure.
Meru is in the Eastern region and endures heavy rainfall between March and May, as well as from October to December. The erratic nature of the rainfall poses challenges, particularly for agriculture.
Narok is in the Rift Valley, where prolonged dry spells and intense short rains can lead to flash floods that damage crops, livestock and infrastructure.
Nyandarua and Nyahururu are in the Central highlands and have both experienced changing rainfall patterns. The short rainy seasons have become longer and wetter, leading to a higher risk of flooding. The long rainy seasons have become shorter and drier. Nyandarua has recently experienced more intense rainfall.

After the pilot, the first phase ultimately involves a national rollout in Kenya. The second phase would be to launch the product in Ghana and Rwanda. Thereafter, VisionFund expects to roll ClimaCash+ across its 23 microfinance institutions spread out across the globe. Importantly, other microfinance institutions have expressed an interest in rolling the product out across their networks, while some non-governmental organisations are keen to offer this to their target communities to improve resilience.

Why ClimaCash+ may serve as an innovation model to distribute microinsurance

ClimaCash+ is an example of how two microinsurance organisations can collaborate. VisionFund was inspired by the simplicity, effectiveness and success of its hospi-cash products available across 14 markets. For IBISA, this presented an opportunity to build a climate insurance product based on some of the factors that had made hospi-cash models popular. Speed and transparency are the key drivers that are core to ClimaCash+, for it to appeal to a mainstream customer base and achieve scale. VisionFund’s commitment to building resilience and financial inclusion, and IBISA’s technology and insurance design offer a potential recipe for long-term success.

Within the partnership, VisionFund plays several roles: financial service provider, programme designer and implementing partner, while combining its local and international expertise in microfinance. VisionFund has a well-known track record in implementing microinsurance for borrowers, given its extensive ground presence, and serves as the product distributor – both to offer ClimaCash+ and educate would-be users about its benefits. This approach also demonstrates how relevant microfinance institutions remain in microinsurance, even to roll out digital-first or tech-enabled solutions.

IBISA is responsible for the insurance design, technology application, payout logic and parametric modelling expertise. It shares the same constraints VisionFund faces, notably customer price sensitivity, product simplicity and user trust. Understanding these enabled IBISA to design a working insurance product that is technically proficient, reliable and easy to scale. Monitoring risks, tracking coverage and calculating payouts is also IBISA’s responsibility.

“This is more than just insurance: it is about building resilience and empowering vulnerable communities to withstand the changing climate. By adapting hospi-cash to the climate context, we are helping to safeguard livelihoods and secure a sustainable future.”

Solène Favre, Global Insurance Director – VisionFund

“With ClimaCash+, we’re working to make climate insurance not just a safety net, but a standard feature in everyday financial services. By combining automation, simplicity and affordability, we’re lowering the barriers to adoption and creating products that can scale – embedded in loans, integrated with platforms and designed for the realities of vulnerable communities.”

Maria Mateo Iborra. Co-Founder and CEO – IBISA

ClimaCash+ is, in some ways, a departure from VisionFund’s other insurance products

While VisionFund already offers a range of microinsurance products, ClimaCash+ differs from existing value propositions:

Ardis is a climate meso-insurance product that covers VisionFund’s microfinance loan portfolios in the event of a major disaster. The microfinance institution receives the payout, which is used to provide loans to allow borrowers to recover faster from a shock. There is no direct benefit to clients.
VisionFund offers crop insurance, which covers smallholder farmers’ crop losses in the event of a disaster. ClimaCash+ differs by covering anyone who is affected by a climate shock.
Across several countries, VisionFund offers a cash payout as part of credit life insurance for climate shocks.

Notably, ClimaCash+ serves as a dedicated product to cover climate-related risks.

While it is too early to assess the pilot’s results, several customers have expressed positive feedback. Many have found the onboarding process to be straightforward. The insurance was also deemed easy to understand, while the premiums were considered affordable. While considered practical, there has been widespread appreciation among the target users about knowing exactly how much to expect when a payout is due. This may bring much-needed predictability, which may help would-be beneficiaries to plan.

For VisionFund, ClimaCash+ can improve financial inclusion and access to insurance for low-income communities. The product aims to protect both livelihoods and assets, particularly in remote and underserved areas. Despite differences, ClimaCash+ is similar to other VisionFund products: the ultimate aim is to protect livelihoods against life risks. Borrowers should be able to invest in their businesses and provide for their families with confidence, to foster entrepreneurship and improve resilience. This is part of VisionFund’s objective to offer a safety net for vulnerable populations, so that they can anticipate, absorb and recover from shocks – as part of the broader goal of poverty reduction and sustainable development.