ZEP-RE Extends Planet Partnership for Drought Insurance Program in Horn of Africa

Rhea-AI Summary

Planet Labs (NYSE: PL) has extended its contract with ZEP-RE, an African reinsurance company, to enhance drought insurance in the Horn of Africa. The partnership, which began in October 2022 as part of the World Bank-funded DRIVE program, aims to improve financial services for pastoralists.

Leveraging Planet's satellite data to monitor vegetation health over 1,000,000 km², the program supports over 2 million pastoralists. The goal of reaching 1.6 million pastoralists was achieved in year two, ahead of the five-year target. The collaboration will continue until October 2027.

Planet's data provides transparency, trust, and efficient payout mechanisms for drought-affected areas. The DRIVE program involves the governments of Djibouti, Ethiopia, Kenya, and Somalia.

Positive

• Extended contract with ZEP-RE until October 2027.
• Supports over 2 million pastoralists in the Horn of Africa.
• Achieved the milestone of reaching 1.6 million pastoralists in year two, ahead of schedule.
• Planet’s satellite data provides fast and efficient payouts to pastoralists.
• Collaboration with ZEP-RE enhances business continuity in drought-prone areas.
• Partnership involves multiple African governments and is funded by the World Bank.

Negative

• The program's success heavily relies on continuous funding from the World Bank and governmental support.
• Drought risk remains a persistent threat, which could still impact pastoralists despite the insurance program.
• Dependence on satellite data for accurate drought assessment carries risk if data accuracy or satellite functionality is compromised.

Financial Analyst

Financial Analyst's Perspective:

The contract extension between Planet Labs and ZEP-RE is noteworthy because it solidifies Planet's revenue stream through a reliable, long-term partnership, enhancing its financial stability. The initial collaboration's success, evidenced by exceeding the projected reach of 1.6 million pastoralists three years ahead of schedule, underscores the efficacy of Planet's solutions.

Risk Mitigation: The drought insurance program provides a steady stream of revenue for Planet, reducing the company's exposure to market volatility. It diversifies Planet's customer base within the insurance sector, further stabilizing its financial outlook.

Revenue Growth: With the contract running until October 2027, this partnership ensures a predictable income flow. Furthermore, the expanding scope of the program enhances the potential for incremental revenue as more data services are leveraged.

Valuation Impact: Investors may view this agreement as a positive catalyst for Planet's stock, potentially leading to a more favorable valuation. The steady revenue from this long-term contract can be seen as a risk-reducing factor, which typically commands a premium in stock valuations.

In conclusion, this partnership extension with ZEP-RE positively impacts Planet Labs’ financial outlook by solidifying a long-term revenue stream and expanding market reach.

Market Research Analyst

Market Research Analyst's Perspective:

The collaboration between Planet Labs and ZEP-RE highlights a strategic adaptation to the insurance industry's evolving needs, particularly in the climate and environmental risk sector. The success of Planet’s satellite data in supporting over 2 million pastoralists demonstrates the growing importance and reliability of geospatial data in insurance underwriting and claim processing.

Market Positioning: Planet's ability to provide near-daily satellite data allows for high-frequency tracking of vegetation health, a critical factor for an effective drought insurance program. This situates Planet as a leader in integrating advanced technology within the insurance sector, potentially opening doors to additional strategic partnerships.

Competitive Advantage: The customized drought index and the ability to make fast payouts based on objective data are significant improvements over traditional insurance models, which rely on less frequent, ground-based data collection. This provides a competitive edge, setting a new standard for insurance solutions in climate-vulnerable regions.

The partnership's success reinforces Planet Labs' market position and enhances its reputation as an innovative, reliable data provider. This is beneficial in both attracting new clients and retaining existing ones.

SAN FRANCISCO--(BUSINESS WIRE)-- Planet Labs PBC (NYSE: PL), a leading provider of daily data and insights about Earth, today announced a contract extension with ZEP-RE, an African reinsurance company headquartered in Nairobi, Kenya. The extension follows a successful first year of collaboration leveraging Planet’s insurance solutions to enhance drought risk protection in the Horn of Africa (HOA) and paves the way for continued collaboration for a 5-year project ending in October 2027.

Today, ZEP-RE uses Planet solutions to expand its insurance program and is currently supporting over 2 million pastoralists affected by drought in the HOA. This is through a drought index that has been customized by location to determine payout amounts, premium rates, and enable direct claims payment to the pastoralists. By year five, the program aimed to reach 1.6 million pastoralists; it achieved this milestone in year two.

“Drought is a persistent threat not only to the health and well-being of livestock in the HOA, but also to the livelihoods of communities, impacting their economic stability, social cohesion, and overall quality of life,” said Berend de Jong, Global Insurance & Finance Lead at Planet. “Our data is a powerful and unique tool for ZEP-RE to develop and execute insurance programs that help protect the livelihood of pastoralists in these drought-vulnerable geographies. Planet data helps provide transparency and trust for all partners involved. The strength of our satellite network enables the continuity of the data service. We look forward to continuing and expanding this critical work together.”

ZEP-RE uses Planet satellite data and reporting to measure vegetation health for an area more than 1,000,000 km² in the Horn of Africa. ZEP-RE then uses this data to quantify conditions, provide objective measurements of drought, and fast payouts to impacted pastoralists in case of a drought situation.

“Since our partnership began, we have been impressed by the resilience and scope of Planet’s data set,” said Hope Murera, CEO at ZEP-RE. “Through near-daily data availability, we are able to track shifting NDVI values with high frequency helping us be more efficient in our payouts to better serve these vulnerable communities affected by drought.”

ZEP-RE and Planet’s partnership began in October 2022 as part of the DRIVE program, intending to enhance pastoralists’ access to financial services for drought risk mitigation, include them in the value chains, and facilitate the livestock trade. Since then, ZEP-RE has leveraged Planet satellite data to execute the risk protection product to support business continuity and expand its critical work in the region. DRIVE is a World Bank funded project in partnership with the governments of the four participating countries in the HOA; Djibouti, Ethiopia, Kenya, and Somalia.

Learn more about how ZEP-RE leverages Planet data for drought insurance programs.

About Planet

Planet is a leading provider of global, daily satellite imagery and geospatial solutions. Planet is driven by a mission to image the world every day, and make change visible, accessible and actionable. Founded in 2010 by three NASA scientists, Planet designs, builds, and operates the largest Earth observation fleet of imaging satellites. Planet provides mission-critical data, advanced insights, and software solutions to over 950 customers, comprising the world’s leading agriculture, forestry, intelligence, education and finance companies and government agencies, enabling users to simply and effectively derive unique value from satellite imagery. Planet is a public benefit corporation listed on the New York Stock Exchange as PL. To learn more visit www.planet.com and follow us on X (formerly Twitter).

About ZEP-RE

ZEP-RE (PTA Reinsurance Company) is a specialized institution of COMESA with the mandate to promote the trade in insurance and reinsurance trade through the creation of capacity, training of the region's insurance personnel, provision of technical services and the reinvestment of premium funds within the region.

The Horn of Africa De-risking, Inclusion and Value Enhancement (DRIVE) for pastoralist economies is a $360.5m project funded by the World Bank and partners to enhance pastoralists' access to financial services for drought mitigation and include them in value chains and facilitate livestock trade To learn more, visit ZEP-RE and DRIVE.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520741868/en/

Planet Press

Claire Bentley Dale

comms@planet.com

Planet Investor Relations

Chris Genualdi, Cleo Palmer-Poroner

ir@planet.com

Source: Planet

FAQ

What recent contract extension did Planet Labs announce?

Planet Labs announced an extension of its contract with ZEP-RE to continue enhancing drought insurance in the Horn of Africa until October 2027.

How does Planet Labs support ZEP-RE's drought insurance program?

Planet Labs provides satellite data to monitor vegetation health and determine payouts for over 2 million pastoralists affected by drought in the Horn of Africa.

What milestone did Planet Labs and ZEP-RE achieve in their drought insurance program?

They achieved their five-year milestone of reaching 1.6 million pastoralists within two years.

Which countries are involved in the DRIVE program supported by Planet Labs and ZEP-RE?

The DRIVE program includes Djibouti, Ethiopia, Kenya, and Somalia.

How does Planet Labs' data assist in drought risk management for ZEP-RE?

Planet Labs' satellite data helps measure vegetation health, enabling accurate drought assessment and efficient payout mechanisms for affected pastoralists.