Accra, Ghana, 27 April 2017 – IFC, a member of the World Bank Group, and Africa Reinsurance Corporation supported a two-day technical workshop on risk modelling and strategic decision-making for index insurance products.
Most of the agricultural land in Sub-Saharan Africa is rain fed, and many regions are vulnerable to climate shocks such as drought, flooding, and irregular rainfall. To limit their losses in any given year, smallholder farmers often invest very little into their land, which leads to reduced yields and contributes to food insecurity. Insurance can be a good risk management tool for these smallholder farmers, but the traditional insurance market largely fails to meet their demand for affordable insurance. Index insurance provides an innovative and more efficient solution for these farmers to protect their crops against losses and encourage investment.
James Seward, Practice Manager for the World Bank Group’s Finance and Markets Global Practice, Africa region, said, “The agriculture sector is a critical part of most economies in Africa and protecting farmers and agribusinesses from weather-related risks is critical, especially as the impacts of climate change become more pronounced. Mitigating weather-related risks is also an important precondition to providing credit, stimulating investment in farming, and increasing productivity among smallholder farmers in Sub-Saharan Africa. High level training helps develop the skills to create new and innovative index-based insurance products in the regional market, which in turn will increase insurance penetration to rural and low-income markets in Africa.”
The workshop was delivered by the Global Index Insurance Facility, a multi-donor trust fund implemented by the World Bank Group that works to provide access to finance to smallholder farmers, micro entrepreneurs, and microfinance institutions. It gathered 12 Insurance Regulators and 29 CEOs from major insurance companies in Sub-Saharan Africa, and will be followed by a week-long training on index insurance for insurance companies’ technical staff.
About Global Index Insurance Facility
The Global Index Insurance Facility (GIIF) is a multi-donor trust fund that works to provide access to finance to smallholder farmers, microentrepreneurs, and microfinance institutions through the development and growth of local markets for indexed and catastrophic insurance in developing countries. It is supported by the European Commission; the African, Caribbean and Pacific (ACP) Group of States; Governments of the Netherlands and Japan. The facility is part of the World Bank Group’s Finance & Markets Global Practice. For more information, visit http://www.indexinsuranceforum.org .
About Africa Reinsurance Corporation
Established in 1976 by 36 member States of the African Union and the African Development Bank Group (AfDB), The African Reinsurance Corporation (AFRICA RE), the leading reinsurance company in Africa and the Middle East, is a pan-African financial institution with diplomatic status in its current 41 African member countries. The purpose of Africa Re is to foster the development of the insurance and re-insurance industry in Africa, to promote the growth of the national, regional and sub-regional underwriting capacities and to support African economic development. For more information, visit http://www.africa-re.com
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit http://www.ifc.org
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