The International Finance Corporation (IFC), has earmarked $970,000 for the development of agriculture insurance in Nigeria.
IFC in a document on its project information and data portal stated that an estimated total budget of $970,000 was earmarked for all project-funded activities.
According to the corporation, the financial commitment was hinged on its new Africa Inclusive Insurance Programme, which will run to June 2025 and will engage insurance sector clients in 14 countries across the continent to strengthen the resilience of over five million small holder farmers and MSMEs to climate-related and other shocks.
On the project description, IFC, a member of the World Bank Group, stated that the project builds on lessons learnt from past IFC projects and information gathered from a wide range of insurance stakeholders in Nigeria to define interventions that would ramp up the outreach of inclusive insurance.
IFC noted that it has access to experienced technical staff and consultants who have the capacity to successfully deliver project activities, adding that activities will be organised around three main components.
The first component is the development of inclusive insurance products and capacity building. Under this component, it will provide advisory services for the development of new climate insurance products and risk analytics; the enhancement of existing products; the strengthening of insurers’ business development and underwriting capacity and the enhancement of the regulator’s supervisory capacity.
The second component involved the development and promotion of strategic partnerships and and digital solutions. The overall objective of this component is to establish more diverse, efficient and sustainable insurance product distribution channels and insurance processes.
The third component included knowledge management and visibility. Under this component, it will focus on knowledge management which will cut across the other components of the programme. Knowledge management activities will include producing online and other publications on lessons learnt, thought leadership on best practice in climate insurance, research on emerging technologies, social media messages, and impact stories. It will also involve the organisation of exchanges, for example South-South exchanges between IFC partners in Asia and Africa, exchanges between insurance practitioners from different African countries, and exchanges with other international organisations and donor-funded programmes.
IFC Financial Sector Specialist, Global Index Insurance Facility, Sharon Onyango, while speaking on the topic, IFC’s Agriculture Insurance Initiatives in Africa, at the just concluded 2022 Africa Re Agriculture Insurance Workshop in Lagos, noted that between 2015 and 2020, IFC’s index insurance interventions facilitated issuance of policies to over five million small holder farmers by client’s beneficiaries in five countries.
She disclosed that the IFC also facilitated generation of over $45 million in premium by reinsurance and insurers, attracting 26 private insurance companies into the market.
She said: “IFC also supported development of partnerships between insurers and public sector players to embed insurance in agriculture sector development programs. There was the farmer input support program in Zambia where over one million farmers receive insured inputs each year.
“The Corporation also engaged in supporting development of partnerships between insurers and IFC agribusiness and microfinance clients. For example, agribusiness client in Mozambique, engagement with regulators across different countries including the National Insurance Commission (NAICOM)”.
She maintained that IFC insurance support for Nigeria will be at levels that include research and preparatory activities; insurer engagement; identify interested insurers; conduct due diligence and conduct needs assessment.
“It would include market level supports, which entails, activities targeting groups of insurers and farmer aggregators; capacity building –broad agri insurance and climate risk assessment concepts; knowledge exchange on best practice and awareness raising”, she added.
SOURCE: THENATION
