Africa Re, IFC seal pact on farmers’ access to agric insurance initiative
Africa Reinsurance Corporation has signed an agreement with the International Finance Corporation (IFC), a member of the World Bank Group, to help underwriting companies in Nigeria develop innovative agricultural insurance products for farmers, against hazards in their farming process.
The scheme was launched by the Commissioner for Insurance, Mohammed Kari, in Lagos, at the headquarters of Africa Re.Under the agreement, Africa Re, a pan-African reinsurance company in Nigeria and IFC’s Global Index Insurance Facility will help Nigeria’s underwriters develop agricultural insurance products and deepen their index.
These index insurance products will help protect farmers against environmental risks such as drought, floods, erratic rainfall, and other natural hazards.The Index-based agricultural insurance pays out claims based on transparent parameters like rainfall and does not require costly field visits to verify losses, which is an innovative and efficient way for farmers to protect themselves against losses.
The Deputy Managing Director/Chief Operating Officer of Africa Re, Ken Aghoghovbia, said: “We are excited to be partnering with IFC in assisting Nigerian insurers develop appropriate insurance products for small holder farmers.
“This initiative will certainly help move Nigeria towards its goal of food security and it is in line with Africa Re’s mission to support African economic development.”IFC Country Manager for Nigeria, Eme Essien, said: “IFC’s support for affordable and accessible agricultural insurance will help Nigeria’s farmers mitigate the effects of climate-related shocks, protecting them against catastrophic losses and unlocking access to finance.
“Developing a sustainable agricultural insurance industry also requires strong commitment from regulators, such as the Nationla Insurance Commission, NAICOM, who embrace innovation to help farmers manage their risks.
“Farmers with crop insurance are also more likely to access other financial products, including credit, and to invest in higher quality production inputs. However, the traditional insurance market has largely failed to meet smallholder Nigerian farmers’ demand for affordable insurance with its high premiums and transaction costs.
“IFC’s and Africa Re’s specific support to insurance companies will include helping them design specialized insurance products and develop digital platforms so farmers can easily view and compare index insurance off.
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