For Immediate Release
Sunday 28th February, 2016
60,000 FARMING HOUSEHOLDS ACCESS WEATHER INSURANCE COVER
Over 60,000 farming households are insured against drought, dry spells and other adverse weather events in Zambia in the 2015/2016 farming season. This implies that approximately 380,000 people in rural-households have access to drought insurance and over 300,000 people also have access to Funeral insurance, through the coverage of the 60,000 farming households in the current season.
This significant scale-up has been facilitated by a collaborative partnership between Musika, Financial Sector Deepening Zambia (FSDZ) and Mayfair Insurance Company Zambia Limited and Focus General Insurance Limited. The products have been developed with the support of Risk Shield Consultants Limited.
This was achieved by securing partnerships with a range of distribution channels including a contract farming operation, a farmer organisation, an international agency and by linking the insurance products with the Government's Farmer Input Support Programme (FISP) ‘e-voucher’ pilot programme. In total, approximately 58,800 small-scale farmers and 80 medium-scale farmers have been insured, with an effective outreach to over 60,000 farming households. An economic value of approximately 70 million ZWK has been insured. Additionally, over 50,000 farmers are being covered with life insurance via a product, which provides packaged weather-index and Funeral insurance coverage, together with farm inputs on credit.
"This is an incredibly exciting watershed moment where we have succeeded in scaling up agricultural insurance to a level where we're working with tens of thousands of farmers, on a self-sustainable basis and we have some innovative features in the product to manage basis risk and maximise client value, while still being commercially viable for the insurers and reinsurers," said Agrotosh Mookerjee, Actuary and Managing Director of Risk Shield Consultants.
Risk Shield Consultants, in partnership with key stakeholders in the insurance and agriculture sectors, aims to increase the number of insured farming households to 500,000 in the next farming season.
"The most crucial process of monitoring the weather and servicing the current products is currently ongoing. The support we have received from the insurers- Mayfair and Focus and their reinsurers is phenomenal. We will continue to work closely together with the Government of Zambia and our private sector partners to achieve the same," said Mookerjee. "Our next target would be to facilitate insurance for at least half a million farming households for the next season.”
"In what is turning out to be an extremely harsh El Nino season, we have partnered effectively with some of the largest agri-businesses and farmer organisations in Southern Africa to implement drought insurance and other covers in over 200 locations in over 20 districts throughout Zambia," said Joseph Kakweza, COO of Risk Shield.
As an organisation that stimulates and supports private investment in the smallholder and rural markets, Musika partnered with FSDZ to provide both financial and technical support to Focus General Insurance and Mayfair Insurance Company towards the development of weather index and other agricultural insurance products for the lower end of the market. As part of its wider support to the Ministry of Agriculture’s ‘e-voucher’ pilot programme, Musika was instrumental in integrating weather insurance cover for smallholders accessing inputs under the programme in one of the 13 pilot districts.
“With an increasingly unpredictable climate, weather index insurance is an important Climate Smart Agriculture approach that plays a critical role in cushioning some of the key climate risks and building climate resilience of smallholder farmers. Since 2013, Musika has been working with local and international insurance companies and agribusiness aggregators to bring the benefits of weather index insurance to the smallholder market,” said Musika Managing Director, Reuben Banda.
“We are excited to be part of an innovative and brave partnership in bringing products and services that are meaningful to a market segment that has remained un-served for many years in the insurance business,” Said Humphrey Kabwe, Managing Director of Mayfair Insurance Zambia Limited.
Pamela Hamasaka – Communications & Outreach Manager