Index Insurance Forum

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ACRE Africa (formerly the Kilimo Salama project of the Syngenta Foundation for Sustainable Agriculture) is having an active project in Kenya, Rwanda, and Tanzania. The largest private sector index-based insurance program in Kenya and Africa develops and offers insurance for African farmers (smallholder to large-scale commercial farmers) so that they can feel confident investing in their farms and feed their communities. The initiative has designed insurance products to cover a variety of crops against drought, erratic rain, and disease. is an insurance initiative of the Syngenta Foundation for Sustainable Agriculture. It develops and offers insurance for African farmers (smallholder to large-scale commercial farmers) so that they can feel confident investing in their farms and feed their communities. The initiative has designed insurance products to cover a variety of crops against drought, erratic rain, and disease.
PG activities started in 2012 with weather station-based index insurance (maize, groundnut). Nevertheless the first year the price of the product was really high and few farmers bought the product. The product was reviewed, together with the farmers’ organizations, and CIRAD in 2013.
The recent path of Tropical Storm Isaac in September 2012 caused the destruction of plantain fields in the southern region. This situation forced the national authorities to provide in kind assistance (i.e. planting materials, fertilizers, cleaning labor, land preparation) to the most affected farmers. Although some insurers provide agriculture insurance, the Ministry of Agriculture does not have a pre-defined budget to tackle the negative effects caused by events in the agricultural sector while it faces significant contingent liabilities.
Papua New Guinea (PNG) is a lower middle income country located in the Asian-Pacific region. Agriculture is the predominant source of livelihood in the country, with the agricultural sector accounting for 67% of the total labor force and 35% of the GDP in 2010. PNG has a very high exposure to earthquake, tsunami and volcanoes as well as being affected by climatic perils including tropical cyclones and the influence of the El Nino Southern Oscillation (ENSO) cycle which brings with it extremes of drought and excess rain and flooding.
Benin is a small country with a population estimated at just under 10 million in 2011, and the national economy relies on the agriculture sector, in particular on cotton. Indeed, the agriculture sector accounts for about 32% of GDP and is the source of livelihood for nearly 70% of the country’s workforce. As part of its Growth and Poverty Reduction Strategy (2011-2015), Benin has identified agricultural diversification and improved agricultural productivity as two key priorities.
In Mozambique, agriculture accounts for approximately 32% of GDP and involves over 81% of the population. Yet, only a fraction of Mozambique’s potentially arable land is currently under cultivation. This lack of arable land usage is in large part due to risk aversion on the part of farmers and financial institutions since natural hazards such as droughts and floods regularly affect agricultural production. Up until recently, no market for agriculture insurance products existed for smallholder farmers in Mozambique leaving poor farmers in the country highly exposed to natural perils. This hinders their access to third-party capital, discourages the use of new farming techniques/technologies and overall hampers the ability of smallholders to exit poverty. As a direct result of a Local Capacity Building grant awarded to Guy Carpenter in 2011 from the World Bank Group's GIIF, the firm ─ in conjunction with the Asia Risk Centre Inc., Hollard Mozambique and EMOSE ─ designed, developed, and deployed two agriculture weather index insurance pilots in Mozambique in late 2012. The index-based insurance products covered maize farmers in the district of Chimoio and cotton production in the districts of Lalaua and Monapo.
With the amendment of the Insurance act in 2011, the IRA of Uganda has become in charge of the regulation of micro-insurance. One of the main products considered under this business is a microinsurance product for farmers which would enhance their access to credit.
GIIF worked with MiCRO through capacity building as well as subsidizing microinsurance premiums paid by participating MFI clients in order to support the expansion of an index-based catastrophe micro-insurance product that was the first index insurance project funded by GIIF in the Caribbean. MiCRO is a reinsurance provider based in Barbados. MiCRO currently provides natural catastrophe and weather index insurance to microfinance institutions (MFIs), which in turn insure low-income micro-enterprises.
PlaNet Guarantee first sold products in Mali in 2011. The project provided satellite based weather index insurance for cotton/maize farmers in the country, while farmer cooperatives were the main distribution partners.
Argentina’s agriculture sector is very vulnerable to weather risks. For instance, cotton in the Chaco Province - the most important cotton producing area in Argentina and the third poorest province - is very exposed to drought, excess rainfall and pests. Similarly, cattle-rearing in southwest Buenos Aires Province is very exposed to droughts which impact severely on pasture production.
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