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Thursday, 06 December 2012

Index Insurance program in Africa

The EU in collaboration with the ACP group supports a pilot program aimed at introducing the index insurance in the African market. The Global Index Insurance Facility program (GIIF) is managed by the World Bank and the International financial corporation (IFC), and was launched at the end of 2009 in Kenya, in order to address the scarcity of affordable insurance protection against natural disasters in developing countries.
By the end of 2013 it is expected that 200.000 insurance contracts to have been signed. This would benefit around 1 million total households. Up to present, eight different project partners (insurance companies) have been involved in the program. In its first phase, the GIIF offers premium supports, but organizers hope to be able to faze it out within the next two years.
According to Shadreck Mapfumo, GIIF Program Manager, the idea of the program is to move beyond payloads, and to concentrate on building capacity, given that the more institutions start offering insurance, the less premium have to be paid by the GIIF. Also, an extension of the GIIF to the Caribbean is being considered.
Index insurance uses a weather index (for example rainfall), and not a possible consequence of weather (for example crop failure) to determine payouts to the insured farmer.
The GIIF program has been presented on Tuesday 4th December by European Commission, ACP and the World Bank representatives at a conference organized by the Development and Cooperation – EuropeAid DG in Brussels.

 

Source: CTA, Development and Cooperation – EuropeAid