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191,626 farmers now enjoy cover under insurance index program

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Insurance, IICCBy Cynthia Alo

The number of small scale farmers in the country who enjoyed insurance cover under the Nigeria Index Insurance program rose by 1,214 percent to 191,626 this year from 14,589 farmers in 2017.

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The Deputy Managing Director and Chief Operating Officer, Africa Reinsurance Corporation, African Re, Mr.Ken  Aghoghovbia , disclosed this in Lagos during  a workshop targeted at addressing agric insurance business challenges in Nigeria.

He said that the number of approved agriculture underwriters also increased to 14 from four underwriters during the period under review.

He stated: ”Since launch of the Nigeria Index Insurance program, African Reinsurance Corporation in collaboration with International Finance Corporation (IFC)  has initiated various activities in the market to achieve the key objectives of the program.

“The first index insurance program was written in 2017 for NIRSAL rice scheme where four underwriters, Nigeria Agriculture Insurance Corporation, NAIC, AXA Mansard, Leadway and Industrial and General Insurance, IGI, provided insurance to the scheme supported by lead capacity from Africa Re. A total of 14,589 farmers were covered during the wet season program. Since then approximately 191,626 small scale farmers have been insured on six major index schemes.”

According to Aghoghovbia, underwriters still face challenges in the implementation of index insurance contracts for farmers.

He  said: “Most of the challenges include; basis risk outcomes, absence of reliable historical yield data sets, non-compliance by farmers to standard farm agronomy practices as well as policy terms and conditions, affordability of premiums by farmers, unreliable crop cuts assessments and inadequate reinsurance capacity.”

He however noted that with such workshop the challenges facing the Nigerian insurance industry in the implementation of agriculture index insurance contracts to farmers will be a thing of the past in the next two years.

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He explained that the contents for the workshop were designed based on the market needs and the workshop provided an opportunity for insurers in attendance to be adequately trained on Price Index; Digital Solutions in the Agriculture Insurance Space and Practical Crop Cuts Methodology which includes physical farm visit.

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