How risk transfer concepts become possible for aid organizations
Welthungerhilfe, one of the largest private aid organizations in Germany, is always looking for innovative approaches that help to effectively combat hunger in the world. The organization is currently testing a mobile app in areas affected by hunger in India that captures children precisely using a 3D scan. The scan can be used to determine whether a child is undernourished. Meaning that a child suffers from an unbalanced diet, where there is a lack of certain vital nutrients.
For the development and operation of this app, Welthungerhilfe was looking for a worldwide Cloud platform. We have been in contact with the organization since January and are now providing Welthungerhilfe with computing capacity from the Microsoft Cloud. This will enable developers to evaluate 3D scans with deep learning models from Azure’s AI services.
An economic view of data
In addition, Welthungerhilfe needs partners with sound analytical know-how. Munich Re is involved and I met its chief economist, Dr Michael Menhart, on the occasion of this project. He explained to me how malnutrition and a lack of food affect a country’s productivity: “It leads to a higher mortality rate and increases health costs because people who suffered from malnutrition in their childhood are more likely to be affected by chronic illnesses.”
Furthermore, says Menhart, nutrition has a significant influence on education. Very often families spend all their money to buy food for their children. There is no investment in education, so the children earn less in their future lives. “Combining all these factors – from lack of education and poor health to higher mortality – malnutrition and lack of food reduce the gross domestic product by up to 10 percent,” concludes Menhart.
I was interested in how Munich Re defined its role in this environment. “We are a global reinsurance company. And being active in all parts of the world means that we are influenced by all developments in the world,” Menhart explains. “This makes malnutrition and lack of food relevant to us as well.”
This perspective explains why the reinsurance company has long been committed to sustainable risk management and innovative financial solutions. To this end, Munich Re has entered into a joint venture with the Hollard Insurance Group: Social Impact Partners (SIP). “At SIP we are the link between Munich Re’s operational business units on the one hand and the humanitarian organizations in the development aid sector on the other hand,” says Hanna Grewe, SIP, whom I met during this project. “We know the possibilities and limitations of insurability in this area, but also the challenges facing organizations.”
One goal: Aid projects´ risk assumption
According to the expert, one of SIP’s core tasks is to provide tailor-made financing and insurance solutions for all types of social impact organizations. “They face a wide range of risks, including natural catastrophes, infrastructure deficiencies and political risks. But a professional, comprehensive view of risk exposure is rare in this sector,” says Grewe, describing their situation. There are only a few innovative risk transfer and financing solutions for this, says Grewe. “This is no surprise: It is extremely difficult to obtain comprehensive and reliable data from developing countries. But they are necessary to be able to develop new concepts.”
At this point, cooperation with Welthungerhilfe opens new opportunities. The “Child Growth Monitor” is an approach in which health data is collected and evaluated in a structured way on the ground, explains Grewe: “These data points could be used as KPIs to measure the success of aid projects and thus contribute to the development of new financing and risk transfer solutions.”
According to Grewe, objective measurability is the first step towards new financing solutions. For this reason, the reinsurance company, together with Social Impact Partners, Microsoft and Welthungerhilfe, called for its second DataThon in mid-November themed: “Identify and combat hunger risks more effectively with Artificial Intelligence.” Big data experts, analysts and developers were invited to develop innovative solutions around the AI algorithm in Munich Re’s LAB.
Welthungerhilfe provided the participants with valid data from the Child Growth Monitor, which they were able to process with comprehensive AI and Big Data services from Microsoft’s Azure Cloud. Thus, in just 48 hours interesting solutions came about, such as an automatic assessment of the reliability of the AI results and a new way to better recognize the movements of children to achieve more accurate results.
In this case study, you can read about how Welthungerhilfe is driving the development of the Child Growth Monitor with the help of Big Data and Artificial Intelligence.
Also read an article by Susanne Mehrtens reflecting her personal impressions from the Indian state of Madhya Pradesh: When artificial intelligence comes alive
Find out in an interview with Jochen Moninger how Welthungerhilfe is focusing on innovation projects today and how Munich Re could benefit from them as well.