Insurance Key To Success in Agriculture: Expert
There is a growing need for insurance in Zimbabwe’s agriculture sector in the face of imminent drought and floods due to climate change.
Speaking at the recently held Finance – Climate Change Adaptation Investment Conference in Zimbabwe’s capital, Harare, African Risk Capacity Chief Executive Officer, Lesley Moyo said although historically it has been difficult to serve the agriculture sector in the insurance industry, changes are beginning to take place.
Farmers had been reluctant to take up insurance mainly because it was difficult for companies to create insurance products for individual farmers. “If insurance companies were to have conversations with individual farmers at a time, it would have been cost prohibitive and not economically feasible,” added Moyo.
“However, with the advent of technology, we are now able to aggregate farmers in large numbers through smartphones and mobile applications and once we have a critical mass of farmers that are registered, we can then provide insurance and finance to those farmers.”
He also said that most insurance companies had not been innovative enough, focusing on the traditional and mandatory classes of business like motor vehicles and fire, ignoring the fact that agriculture was a key part of the economy that needed to be insured.
“There is a change with a number of insurance programmes targeting tobacco, hail and other crops at large and this is the fastest growing segment in the market with growth rates of 100%,” he added.
Moyo implored government to include insurance as a risk mitigation measure in the policy on climate change.
In February 2022, the International Finance Corporation announced a partnership with the Insurance and Pensions Commission (IPEC), to create a market for agricultural insurance products in Zimbabwe to protect small holder farmers from weather elements that reduce yields.