Compagnie Nationale d’Assurance Agricole du Sénégal (CNAAS) has selected Africa Re, the most prominent African Reinsurer, to lead the reinsurance program of 40,000 cotton and maize farmers in Senegal, jointly with AXA CS and CICA Re, according to a press release issued by Africa Re. The news indicates a positive development in the agriculture sector in Senegal, which accounts for 35% of annual GDP, as the country is facing several climate-related risks including drought and floods, undermining food production and jeopardizing food security.

The development of index insurance in Senegal can be traced back to 2009, where, at the request of the Ministry of Finance, the World Bank Group conducted a feasibility study to assess the potential viability of index insurance. In the same year, CNAAS was formed and subsequently requested financial and technical assistance from GIIF to pilot-test index insurance for groundnut farmers. Not only did the project successfully test the operational and technical procedures of weather index insurance, it also laid out the groundwork for index insurance to be properly administered in Senegal through a series of capacity building engagements with local intermediaries, the regulator, and members of Government. To date, more than 18,000 Senegalese farmers have benefited from index insurance.

Recently, GIIF and Africa Re entered an agreement to carry out a risk sharing facility/experience account that aims at decreasing the premium levels for the insured farmers and encouraging local companies to write affordable insurance products. Senegal will be the first country to benefit from this risk sharing facility.