Africa Re has signed an agreement with IFC, a member of the World Bank Group, to assist insurers in Nigeria with the development of innovative agricultural solutions for small holder farmers.
Lunched by the Nigerian Commissioner for Insurance, Muhammed Kari on March 26th 2019, the agreement sees Africa Re work with the IFC’s Global Index Insurance Facility to provide technical assistance to insurers that have a license to underwrite index products, ultimately helping them to develop their business line.
Index-based insurance protection offers rapid payout once the policy has been triggered, being structured to trigger on the basis of predetermined parameters such as rainfall, meaning that it does not require costly and time-consuming field visits to verify any losses.
Ken Aghoghovbia, Deputy Managing Director and Chief Operating Officer (COO) at Africa Re, said: “We are excited to be partnering with IFC in assisting Nigerian insurers develop appropriate insurance products to protect small holder farmers. This initiative would certainly go a long way in moving Nigeria towards its goal of food security and is in line with the Corporation’s mission to support African economic development.”
Under the agreement, the technical support provided by Africa Re to insurers will include specialised product design, the development of digital platforms that will enable a prospective policyholder to view index insurance solutions that are available, compare products from different insurers, review documentation, and select their preferred policy.
IFC Country Manager for Nigeria, Eme Essien, added: “60 percent of Nigerians rely on agriculture for their livelihood. Affordable and accessible risk management tools like index insurance are needed to help farmers mitigate the effects of climate-related shocks, protecting them against catastrophic losses and unlocking access to finance.”