Workstream 2: Action & Implementation
Enable effective action and implementation of high-quality Climate and Disaster Risk Finance and Insurance solutions in poor and vulnerable countries
Program Alliance Partner Update – Summary of Global Index Insurance Facility Activities in 2020
By the World Bank Group
The Global Index Insurance Facility (GIIF) enhances access to finance for smallholder farmers, micro-entrepreneurs and microfinance institutions through the provision of catastrophic risk transfer solutions and index-based insurance in developing countries. To date, GIIF’s regional partners have facilitated nearly eight million contracts, covering approximately 40 million beneficiaries with a sum insured amounting to USD 1.5 billion.
So far, the programme has managed to issue approximately eight million agriculture insurance policies, with an estimated outreach of 40 million beneficiaries globally (cumulative number since 2010). At the beginning of the global Covid-19 pandemic, we conducted a comprehensive survey with 11 implementing partners in Africa and Asia in order to understand the impact of the situation on insurance operations.
The questions focused on collecting feedback about direct, indirect and immediate consequences of the pandemic on agricultural insurance business renewals, business generation, their appetite for agricultural insurance products in the near future and the mitigation measures they are putting in place to cope with the pandemic situation. Although the general outlook portrays a concerning perspective on policy renewal and new business generation, most insurers highlighted that they would retain their interest in agriculture insurance. Some even indicated an increased willingness to diversify their portfolio and commented that digital or insurtech solutions were valued as viable means for minimizing the negative impact on their operations.
Women sorting cotton in Punjab Province, Pakistan. As part of the “Strengthening Markets for Agriculture and Rural Transformation in Punjab” (SMART Punjab) project, GIIF has been providing insurance solutions to improve farmers’ resilience to climate change and natural disasters.
New activities in 2020:
- A feasibility study was conducted in Lesotho to assess the possibility of crowding in the private sector for the agribusiness industry.
- GIIF supports the National Agriculture Insurance Company of Senegal in its efforts to modernize IT infrastructure systems, improve the management of premium and claims-settlement processes, and design an efficient smart premium subsidy programme in order to maximize utilization of public funds.
- In Zambia, Mayfair collaborated with six aggregators for distribution. The Ministry of Agriculture (MOA) confirmed its commitment to continue incorporating risk mitigation strategies into farmer programmes by entering into a three-year contract with Mayfair to continue providing insurance for the farmers who are part of the Farmer Input Support Programme.
- GIIF clients in Cameroon – Activa and AXA Cameroon – have recently been invited by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to capitalize on the Agriculture Finance Promotion Programme (PROFINA) and distribute insurance through microfinance institutions.
In February, GIIF clients in Cameroon - AXA Cameroun and ACTIVA Assurances - held the first compensation ceremony for insured cotton farmers who experienced production losses during the 2019 cropping season
New activities in 2020 (continued)
- GIIF launched a research study to investigate farmers’ understanding and utilization of agriculture insurance products and to evaluate existing industry coverage gaps in Kenya, Senegal and Zambia.
- In Sri Lanka, GIIF facilitated development of a mobile and web application to digitalize land mapping and capture more than 80,000 farmland data points. This pilot project was then endorsed by the Ministry of Agriculture, which was in favour of mainstreaming this as a national database for agroclimatic information.
- The Crop Reporting Service in Pakistan completed the combined tender involving two crop seasons in 2020 and relevant insurers have been finalized.
Farmers in Senegal receiving their payouts from African Risk Capacity to cover losses due to crop failures resulting from the severe rainfall deficits and drought during the 2019 agricultural season.
Ongoing insurtech activities:
- In Sri Lanka, the current digitalization project with the Agriculture and Agrarian Insurance Board has been extended with a focus on automated insurance settlement methods.
- Following the GIIF Insurtech Challenge in July 2019, discussions were conducted with participating start-ups related to a) partnering with a project funded by the World Bank Group to link small dairy farmers to market and b) using a mobile insurance platform in India’s national crop insurance programme. GIIF intends to support the Department of Agriculture in launching a pilot to identify technology solutions for crop-yield estimation and resolve inconsistencies and disputes related to crop-yield estimation based on crop-cutting experiments.