Since 2016, GIIF has been providing technical assistance to Mayfair Insurance, a private insurer registered in Zambia, to build its capacity to underwrite insurance products that protect vulnerable farmers against weather-related crop losses. Mayfair works with select aggregators to more efficiently reach the target farmers and has also been contracted by the Ministry of Agriculture to develop insurance products that can be bundled together with the government input subsidy package under the Farmer Input Support Program (FISP). This way, the input subsidy received by each farmer would be protected against loss due to drought or excessive rainfall, thereby improving their resilience. This approach has resulted in the issuance of more than 2 million contracts, reaching approx. 10 million beneficiaries over the past two years. The Mayfair program also benefits from GIIF’s product development support and technical training workshops that are tailored to the needs of practitioners, regulators and other stakeholders to increase index insurance knowledge and awareness.   GIIF has also partnered with research institutions, such as Columbia University’s International Research Institute for Climate and Society, to offer training on the use of data to improve product design processes, including data collection, analysis and product validation.

In the 2018/19 season, Mayfair Insurance and the World Food Program collaborated to provide insurance coverage to 7,794 farmers. The farmers were part of the WFP’s R4 Rural Resilience Initiative, where they receive a bundle of services consisting of advisory on farm practices that can improve their resilience to climate change, credit to enable them purchase improved and drought-tolerant farm inputs (in collaboration with Vision Fund, an international MFI), insurance to protect these inputs against losses due to unfavorable weather conditions, and access to other financial products such as savings accounts.

Many parts of the country were affected by moderate to severe drought, as a result of which approx. 2 million Zambians were brought to the brink of starvation (BBC, Lifegate). Mayfair paid a claim of ZMW 5,514,270 (approx. $ 452,170) to all the farmers that were insured through WFP. Through its partnership with mobile telecommunications company, MTN, Mayfair was able to make quick payouts to the affected farmers using mobile money. This enabled the farmers to offset any outstanding loans they had with Vision Fund and to purchase food and other consumables that helped to alleviate the effect of the drought on their livelihoods.

In the current (2019/20) season, Mayfair provided index insurance to approx. 874,000 farmers benefiting from the FISP. Farmers in 6 out of the 10 participating provinces were affected by persistent drought in December 2019; as a result, 220,873 farmers will receive a total payout of ZMW 23,975,429 (approx. $ 1.6 million) in the coming days. The claim was a result of the “early dry spell” component of the coverage provided which allows farmers to receive quick compensation in case a drought event occurs during the first month of the season. This enables farmers to purchase inputs for quick maturing varieties of the same or other crops, replant and avoid missing out on the entire season. In addition, the farmers continue to benefit from coverage under the “late dry spell” component of the insurance product, which will compensate them in case drought reoccurs during the season.

For more information, please see the video. 

Photo: Farmers waiting for pay out on the World food program

Photo credit: Mayfair Company Zambia