NIRSAL, Royal Exchange unveil new insurance product for Nigerian farmers
Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), in collaboration with the Royal Exchange General Insurance has unveiled a unique insurance product which provides cover for Nigerian farmers, targeting those in the crop sub-sector in the first instance.
The Hybrid Multi-peril Crop Indemnity-index Insurance product- HM-II for short, would protect farmers from losses during a planting season caused as a result of bad weather in the form of low and high rainfall, early and late season dry spells, lightning, hailstorms and thunderstorms.
The HM-II piloted during NIRSAL Plc’s participation in the 2019 Anchor Borrower Programme (ABP) Wet season farming- also guards farmers against pest outbreak, disease outbreak, fire outbreak and permanent disability or death of a farmer.
At the launch in Abuja, Aliyu Abdulhameed, NIRSAL managing director explained that as part of the HM-II, in a case where the afore-mentioned risks materialise, benefits paid out to the farmer would be up to the maximum loan or the insured amount following the trigger from advanced satellite technology or an assessment by an agriculture expert or both.
According to him, NIRSAL’S policies and initiatives are guided by the fact that besides the Agric sector’s contribution of about 24 percent to the country’s GDP, and jobs for more than 60 percent of the population, 80 percent of the sector’s contribution to the GDP is attributable to smallholder and subsistent farmers who are unfortunately the most vulnerable actors along the agric value chain.
He said in addition to finding it difficult to access sustainable financing, Nigerian farmers and their families are often left to contend with the negative effects of many factors including bad weather, pest outbreak, disease outbreak, fire outbreak, permanent disability and even the death of the farmer.
He said on the back of these factors, and in line with NIRSAL’S mandate, the product was developed in collaboration with Royal Exchange, and support from Swiss Re as well as the regulator, National Insurance Commission (NAICOM).
Leveraging the Insurance pillar, NIRSAL aims to increase the distribution of existing and new Agric insurance products from about 0.5 million farmers in 2017 to 3.6 million farmers nationwide by 2026.
NIRSAL has already reached a milestone of 1,476,289 smallholder farmers who have subscribed to the company’s already-developed insurance products in past farming seasons, according to available information.