Imperatives of agric insurance under climate change
Agriculture in Nigeria is a critical aspect of the nation’s economy, providing direct employment for about 30 per cent of the population, while the sector contributes about 24 per cent to the Gross Domestic Product, according to the Nigerian Bureau of Statistics.
But climate change is threatening this important industry, as its direct effects include fluctuations in rainfall and variable temperatures, altering growing seasons, changes in planting and harvesting calendars, and difficulties in water availability, among others.
In view of these realities, the Federal Ministry of Agriculture and Rural Development (FMARD) has found it necessary to develop a National Agricultural Resilience Framework that defines a pathway for a better adaptation of Nigerian agriculture to the shocks and stress of climate change.
For the moment, farmers insuring their crops is the new paradigm in developed countries and will now benefit Nigerian farmers, if adopted.
Urging farmers to insure their crops and obtain financial support that will boost their ability to cope in the event of a disaster and contribute immensely to the development of the value chain in the country, operators are scripting policies to suit the needs.
Already, Anchor Insurance Limited has introduced the sector travel insurance and agricultural products targeted at deepening penetration in the country.
The Managing Director of the underwriting company, Ebose Augustine, in Lagos, noted that the approval of the products by the National Insurance Commission (NAICOM) provides the opportunity to extend its services and drive them for the maximum comfort of customers.
Augustine stressed that for about 30 years the underwriter has been in operations, it has been known for remarkable excellent delivery of services to its teeming customers.
‘As we officially launch these products in the market, we assure all potential customers of a seamless claims process, which we are acclaimed for. We do not tell stories when genuine claims are reported to us. We assure you of the very best of service as you invest in our policies,” he said.
He maintained that there are special eligibility conditions to be part of these policies.
He said the company got NAICOM’s approval for four Agriculture Insurance products- Multi-peril Crop Insurance, which covers the risk of fire, lightning, pest/diseases, drought, flood, windstorm, and aircraft. It also covers damage for all cash and arable crops.
Fishery Insurance takes care of risks of death of the fish as a result of diseases and collapse of the pond, while poultry insurance is essentially against the death of birds as a result of accidents, diseases, fire, flood, and windstorm.
Livestock Insurance also insures against the death of animals due to accidents, pests/diseases, fire.
A market observer, who spoke to The Guardian, in an interview over the weekend, said: “60 per cent of Nigerians rely on agriculture for their livelihood. Affordable and accessible risk management tools like index insurance are needed to help farmers mitigate the effects of climate-related shocks, protecting them against catastrophic losses and unlocking access to finance.”
The technical support provided to insurance companies in Nigeria will include specialized product design and developing digital platforms that will enable a prospective policyholder to view index insurance products on offer, compare different products from various insurers, review the term sheet and documentation, and select their preferred policy.
The aim of this agreement is to provide thousands of farmers with access to insurance by the end of 2020.