On January 19, 2018, the International Finance Corporation (IFC) and the World Bank organized a workshop in Abidjan to present the results of a feasibility study on index-based agricultural insurance conducted in Côte d’Ivoire between the months of May and September 2017 by the Global Index Insurance Facility (GIIF). As part of the World Bank Group’s Climate Finance and Risk Management unit, GIIF facilitates access to finance for smallholder farmers, micro-entrepreneurs, and microfinance institutions through the provisions of catastrophic risk transfer solutions and index-based insurance in developing countries.

Like many countries in Sub-Saharan Africa, Côte d’Ivoire’s agricultural sector faces risks stemming from climate change which entail high production volatility. This phenomenon is threatening to hamper country’s development as the agricultural sector contributes to approx. 23% of GDP; employs about two-thirds of the active population, and generates around 55% of export earnings. For this reason, GIIF is extending support to the Ivorian Government and the private sector actors involved in the development and sustainability of an index insurance market in the country.

The feasibility study attempted to evaluate development opportunities for index insurance for producers in four agricultural sectors in Côte d’Ivoire namely cocoa, cotton, maize, and rice. The study produced a risk mapping for these different sectors and highlighted the expected added-value created by index insurance in these sectors according to criteria such as the level of exposure to climate risks, the level of organization of the value chain, and the availability of agrometeorological data. A World Bank Group mission visited Abidjan in September last year to carry out a complementary study on aspects related to pricing and conduct a simulation of the cost of the insurance premium within the project's framework.

The January workshop, held at the Sofitel Abidjan Hotel Ivoire, was an opportunity to present to 60 participants from various backgrounds -- government representatives, financial institutions, insurance companies, agribusiness companies, and agricultural professional organizations -- the results of these studies and to further explain strategies GIIF has for agriculture index insurance in Côte d’Ivoire.

Thanks to the active coordination by the Association of Insurance Companies of Côte d’Ivoire (ASA-CI) and with the support of the IFC Country Office in Côte d’Ivoire, the workshop revealed that the actors in the agricultural sector are interested in index insurance, not only because it is an instrument to strengthen producers' resilience in the face of climate change, but also because it could help improve the sector’s overall productivity. Index insurance increases access to finance for producers, and subsequently income.

The study recommended an initial introduction of index products in a few specific sectors e.g. cotton, cocoa, corn, and rice. The expansion into other sectors will depend on lessons from the pilot, stakeholders’ appetite, level of Government’s involvement (for example, via direct premium subsidies), and other opportunities identified along the way. GIIF will provide technical and financial support to this initiative by promoting the enhancement of local expertise in the underwriting of index insurance such as contract design, evaluation, pricing, marketing, and claims management. GIIF will also build the capacity of public and private sector players to create an enabling regulatory and business environment for the development of a sustainable index insurance market in Côte d’Ivoire. 

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