The workshop attracted a total of 42 participants drawn from different sectors of the agriculture value chain including underwriters, aggregators, regulators, farmers’ representatives and journalists. The training content was structured based on the market needs and key topics of interest included price index, digital solutions in the agriculture insurance space and practical crop cuts methodology exercises on a rice farm in the Badagry area of Lagos, facilitated by experienced Africa Re staff and invited international experts on agriculture insurance.

Delivering his opening speech at the ceremony, Mr. Ken Aghoghovbia, the Deputy Managing Director/COO of the African Reinsurance Corporation pointed out that agriculture insurance underwriters in Nigeria target to provide cover for five million farmers in the next two years.

Whilst citing the sad story of the Nigerian agriculture industry of the 70s where Nigerians neglected agriculture and opted for the booming oil and gas windfall, he expressed optimism that Nigeria still has immense economic potential thanks to the Federal Government initiatives that triggered the 2012 Agricultural Transformation Agenda and set the ball rolling for the insurance industry to tap into this opportunity, through the provision of affordable insurance products to farmers whilst at the same time guaranteeing food security.

He stressed that Africa Re’s role as the largest reinsurer in Africa has been put to test with the need to provide adequate reinsurance capacity to the Nigerian insurance industry, a feat that has seen the number of approved agriculture underwriters increase to fourteen as of today.

‘’Initially, agriculture insurance products in Nigeria were provided on indemnity basis with the attendant high costs of administration and inherent risks of fraud. Thus Nigerian underwriters over the years have faced challenges in the implementation of indemnity based insurance contracts, a turn off to insurance penetration. In an attempt to address the challenges posed by indemnity products, underwriters sought to introduce index insurance in Nigeria.” he posited.

A breakthrough was achieved in 2017 when the first index program via NIRSAL rice scheme where four underwriters NAIC, AXA Mansard, Leadway and IGI provided insurance to the scheme supported by lead capacity from Africa Re. A total of 14,589 farmers were covered during the wet season program. Since then, approximately 191,626 small scale farmers have been insured on six major index schemes.

Accordingly, underwriters still face challenges in the implementation of index insurance contracts for farmers. Key among them, he noted include basis risk outcomes, absence of reliable historical yield data sets, non-compliance by farmers to standard farm agronomy practices as well as policy terms and conditions, affordability of premiums by farmers, unreliable crop cuts assessments and inadequate reinsurance capacity.

In his closing remarks, Mr. Aghoghobvia pointed out that the IFC/GIIF fund which Africa Re manages on behalf of the Nigerian agriculture industry stakeholders aligns with African Re’s founding mission in addressing the above industry challenges. “Africa Re supported by its partners will continue to work with IFC to provide solutions to the Nigerian agriculture industry by assisting in providing adequate reinsurance capacity, training, digital solutions and product development”, he concluded.