By Khalifa Hemed
Published March 26, 2021
A multinational financial services company that specialises in insurance and asset management is set on becoming the market leader in Africa’s agriculture insurance.
“There is an ever increasing need to invest in agriculture, given the vital importance of agriculture as a food source, especially in view of the increase in global population”, Delphine Traoré Maidou, Chief Operations Officer for Allianz Africa, noted during a webinar titled ‘The Digitization of Agriculture Insurance Through Parametric Solutions’ that brought together agriculture and insurance experts to discuss the topic on March 24, 2021.
Though agriculture production makes up a substantial portion of the continent’s GDP, Delphine Traoré Maidou observed, only a small portion of the producers are insured.
RELATED: Investment Risks in Africa Identified
“Allianz Africa aims to contribute towards closing the protection gap and positioning itself as a leading agriculture (re)insurance provider on the continent,” she said.
The panelists, who included Reto Schneider, Regional Head of Agriculture at Allianz Re; Lovemore Forichi, Senior Underwriter of Agriculture at Allianz Re; Gregoire Tombez, CEO of WARM Consulting Group Ltd and Co-founder of Green Triangle; Erastus Ndege Ochieng, Asset Manager, Agriculture Underwriting at Africa Re; Omondi Kasidhi, Head, Sustainable Agriculture Sourcing of Diageo PLC; and Traore, not only concurred that climate risks increase the need for investments to make agriculture more resilient but also observed that financial services that can support the development of sustainable commercial agriculture are required to assist in eradicating extreme poverty, boosting prosperity and protecting livelihoods.
RELATED: Empowering Women Crucial to Sustainable Food Security
The insurance industry in Africa is reported to have recorded a cumulative premium of US$300 Million from agricultural insurance in 2020; the southern and eastern regions of Africa contributed more than 80% of the recorded premium.
Reto Schneider stated that “the agricultural sector in the insurance industry could reach the potential of US$1 Billion within 10 years, provided that penetration can be substantially increased.”
The webinar also presented parametrics solutions as the direction for the future as they bring advantages such as high accuracy with state-of-the-art satellite information, hybrid products to address additional perils, increased efficiency through fully paperless processes, fast and automated payouts possible, high level of traceability, combination with loans and integration of the value chain.
RELATED: West and East African Coasts Remain Danger Spots for Ships
Despite certain limitations, “technology is closing the gap between indemnity and parametric crop insurance and allows to get the best of both worlds in a single product”, Gregoire Tombez, stated.
To have a reliable parametrics system that provides efficient solutions, the panel stressed the necessity to bring significant improvements through product suitability, affordability, value chain efficiency, distribution, information and training.
RELATED: Payment Solutions Critical to Minimising Fraud and Boosting Economic Activity
This comes at a time that Allianz prepares to expand its presence in the East African insurance market, building on its experience in Kenya and with the acquisition of the majority of shares in Jubilee General Insurance Company in Kenya, Tanzania, Uganda, Mauritius and Burundi.
This webinar on agriculture insurance, Allianz Africa said, was the second of a series “aiming at sharing with stakeholders pan African solutions that the Allianz Group can offer through its footprint in Africa, by extending to the continent its expertise as a worldwide insurance leader”.
Allianz Africa is part of Allianz SE, a European multinational financial services company that specialises in insurance and asset management. The group is reported to have a presence in more than 70 countries across the world. It is represented in Kenya by Allianz Insurance Company of Kenya Limited.
RELATED: Protect your Business from Cyber-Crime with Cloud Technology