Insuring farmers


Africa insurance pays over 2 million birr for claims
Africa Insurance Company, one of the micro insurance providers in Ethiopia, has settled a compensation claim for the El Nino drought affected farmers at Tigray regional state. The insurance firm, which pioneered the micro insurance business in 2009, has paid a claim worth over 2.44 million birr for insured farmers in the region at a ceremony held at Mekele, a capital of the region, on January 21.
Kassahun Begashaw, Manager of Marketing and Business Development, told Capital that 11,921 farmers affected by the drought were able to receive the compensation. This number is almost half of the total number of insured farmers in the region.
According to the Marketing and Business Development Head, in the late insurance coverage period 24,252 farmers were insured by Africa Insurance with a total sum of insurance coverage of about 27.9 million birr.
According to Kassahun, teff is the major crop affected by the drought, while wheat is also affected in afew villages.
He said that every year, since the insurance policy was lunched in 2009, the number of insured farmers has seen an increase. For instance only 852 farmers were insured in the first year of the launch, now that figure is over 24,000. Kasahun said that the number of farmers who renewed their policy remains constant from the figures of last year.
The program builds on the initial success of Horn of Africa Risk Transfer for Adoption, an integrated risk management framework development by Oxfam America and the Relief Society of Tigray, national and international partners and farmers.
The strategic partnership was initiated to respond to challenges faced by food insecure communities in face of increasing frequency and intensity of climate disasters and other shocks.
The insurance policy is the weather index insurance policy, which links data and satellite information to expected agricultural production in which a specific threshold of rainfall is not achieved during the agricultural season, the index will then trigger a payout for the participants.
According to Kassahun, his company paid over 4.8 million birr in 2012 , the highest claim ever, “A year ago, we settled a claim worth 616,242 birr. Since we launched the product in the region, we have paid insurance claims every year except for the rainy season in 2011,” he added.
The insurance company has also launched the weather index insurance coverage with its partner in Amhara region in 2012.
Africa Insurance Company was is established 21 years ago and have 7.2 percent of the insurance market share currently, making it the leading actor in the sector. The firm’s annual report for the 2014/15 fiscal year indicates that its premiums climbed to 351 million birr, a 4 percent growth compared with the 2013/14 fiscal year. The insurance firm has earned 43.9 million birr in gross profits in the stated period.