The International Finance Corporation (IFC), a member of the World Bank Group, has signed a deal with Africa Reinsurance Corporation to help companies in Nigeria develop innovative agricultural insurance products for farmers, against hazards in their farming process.
The scheme was launched by the Commissioner for Insurance, Mohammed Kari, in Lagos, at the headquarters of the Africa Reinsurance Corporation.
Under the agreement, Africa Reinsurance Corporation, a pan-African reinsurance company in Nigeria and IFC’s Global Index Insurance Facility will help Nigeria’s underwriters develop agricultural insurance products and deepen their index.
These index insurance products will help protect farmers against environmental risks such as drought, floods, erratic rainfall, and other natural hazards.
The Index-based agricultural insurance also pays out claims based on transparent parameters like rainfall and does not require costly field visits to verify losses, which is an innovative and efficient way for farmers to protect themselves against losses.
Ken Aghoghovbia, the Chief Operating Officer of Africa Reinsurance Corporation said “we are excited to be partnering with IFC in assisting Nigerian insurers develop appropriate insurance products for small holder farmers”.
According to Eme Essien, the IFC Country Manager for Nigeria, “this initiative will certainly help move Nigeria towards its goal of food security and it is in line with Africa Reinsurance Corporation’s mission to support African economic development”.
Essien said “IFC’s support for affordable and accessible agricultural insurance will help Nigeria’s farmers mitigate the effects of climate-related shocks, protecting them against catastrophic losses and unlocking access to finance. Developing a sustainable agricultural insurance industry also requires strong commitment from regulators, such as the National Insurance Commission (NAICOM), who embrace innovation to help farmers manage their risks”.