Insurance lab to benefit small scale farmers
Zimbabwe and other countries are working on an insurance lab to come up with climate change mitigation solutions to cover smallholder farmers who rely on rainfall to grow their crops, but have no access to insurance.
Spearheaded by the Insurance and Pensions Commission (IPEC), the insurance lab sponsored by Access to Insurance Initiative will come up with mitigation measures for climate related risks like cyclones and drought.
Three other countries participating in the Insurance Lab are Costa Rica, Grenada and Zambia.
Director Insurance Mrs Sibongile Siwela said: “Climate change affects everyone and emerging risks are coming up as a result. As insurers, we need to come up with climate related solutions.
“We are looking at mitigatory measures to reduce the impacts of these risks. We will focus on agriculture insurance as a priority, it is still a work in progress, but this is the direction we are taking.”
Mrs Siwela said IPEC was on the verge of signing an agreement with a development partner on the developed weather based index insurance and the process which will be complete in a few weeks.
“We are excited that the IPEC and Insurance bills were gazetted and we look forward to the bills being introduced into Parliament,” she said. “We are also working on the no premium no cover policy.”
CredSure operations manager Mr Masimba Chimwara said uptake of agricultural insurance in Zimbabwe was still low.
“Insurance uptake is still very low, in fact, agriculture constitutes about 25 percent of the national Gross Domestic Product and only two percent of our insurance premiums,” he said.
“There is a huge disparity, our agriculture is not adequately insured.
“We still need to teach our farmers, most of them are new to the sector and they do not have a culture of insuring their assets. Also, we note that the economic cycles of the country have gone through hyperinflation where people lost all they had saved, negatively affecting insurance uptake.
“Also bad market practices by some of those insurers who came before us, who had many malpractices than serve the market contribute to low uptake.
“We don’t know what tomorrow holds for us, so we need to secure the seven aspects of agriculture insurance which are human capital, the farmers assets, livestock poultry, crops, equipment, finances and markets.”- The Herald
