World Bank Group member the International Finance Corporation (IFC) and Zimbabwean insurance regulator the Insurance and Pensions Commission (IPEC) have formed a partnership to create a market for agricultural insurance products in Zimbabwe to protect smallholder farmers from weather-related crop damage and other shocks.
Through the partnership, the IFC will assess the risks smallholder farmers face, how they are coping with those risks and will gauge farmers’ appetite for agricultural insurance to protect their livelihoods.
The IFC will also help the IPEC develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers.
Additionally, the IFC will facilitate knowledge exchanges to help Zimbabwe’s insurance providers learn best practices from more developed agri-insurance markets.
Agriculture is a considerable contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about 8% to gross domestic product.
However, there are currently no insurance products in the country specifically designed to protect smallholder farmers.
“One of our key roles as the regulator is to develop the insurance sector in Zimbabwe. This partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events such as drought, floods, heavy rainfall and heat waves,” says IPEC commissioner Grace Muradzikwa.
The Zimbabwe project will draw on the experience of the Global Index Insurance Facility (GIIF), through which the IFC has supported the growth of agriculture and climate insurance markets in Cameroon, Côte d'Ivoire, Mozambique, Nigeria, Senegal, Zambia and elsewhere.
The GIIF is a multi-donor programme managed by the World Bank Group. It was created to address the scarcity of affordable insurance protection against weather and catastrophic risks in emerging countries.
The IPEC develops agricultural insurance solutions that promote sustainable agricultural practices and benefit Zimbabwe’s smallholder farmers. By increasing the penetration of agricultural insurance, the IPEC expects the new programme to speed up the adoption of more resilient and sustainable agriculture practices and boost livelihoods and food security.