The Federal Government says it is working to increase insurance coverage for Nigerian agricultural primary producers from 500,000 to 3.8 million through the recently introduced index-based agricultural insurance.
The programme is hinged on nurturing local and international partnerships aimed at training insurance experts in the country that will midwife the programme.
Speaking on Monday in Abuja at an insurance programme, the Managing Director of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Aliyu Abdulhameed, said his firm was currently in talks with Royal Exchange Assurance, the Nigerian Meteorological Agency (NIMET) and Cellulant for the development of a technology-driven hybrid index insurance product that will include the area yield index, weather index and price index insurance.
He added that the participating firms were also exploring innovative insurance products for livestock to help stem the tide of herdsmen and farmer clashes. The NIRSAL boss also disclosed that Acre Africa of Kenya is a major partner, even as he said its operations were anchored on five pillars.
“These are risk sharing facility pillar ($300 million), insurance pillar ($30 million), technical assistance pillar ($60 million), rating pillar ($10 million) and incentives pillar ($100 million),” he noted.
Abdulhameed stated that though NIRSAL does not provide insurance services, it is, however, supporting the insurance industry to develop innovative and effective agricultural insurance products for agricultural value chain players and will also help link insurance products to agricultural loans.
“In our quest to build a viable and sustainable agro economy where smallholder farm yields are guaranteed, and projected incomes protected, NIRSAL, throughout 2017, worked with a consortium of underwriters (NAIC, Leadway, IGI, AXA Mansard) to develop the Area Yield Index Insurance (AYII) product.
“Through the efforts of the National Insurance Commission (NAICOM), the index-based yield insurance product that covers risks from disease, weather, natural disasters and several other external factors was launched.
“Since the launch of the insurance product six months ago, over 25,000 smallholder farmers have subscribed to it.
Also speaking at the event, the Commissioner for Insurance, Alhaji Mohammed Kari, said the collaboration between NAICOM and NIRSAL has been very successful, adding that product approval has been granted to five companies participating in the pilot scheme. This number, he said, will grow to 20 in the coming years.