The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) has developed a Hybrid Multi-Peril Crop Indemnity-Index Insurance (HM-II).
Speaking during the launch of the product in Abuja, NIRSAL’s Managing Director, Aliyu Abdulhameed, said that the project was developed in collaboration with Royal Exchange General Insurance Company (REGIC).
He said that the HM-II was piloted during NIRSAL’s participation in the Central Bank of Nigeria’s (CBN) 2019 Anchor Borrowers’ Programme (ABP) Wet farming season.
The HM-ll is designed to protect farmers from losses during a planting season caused by bad weather (low and high rainfall, early and late season dry spells. It also covers lightning, hailstorms and thunderstorms), pests, diseases, fires and permanent disability or death of the farmer. In instances where such risks happen, benefits paid out to the farmer would be up to the maximum loan or the insured amount after confirmation by advanced satellite technology, an assessment by an agriculture expert, or both.
Mr Abdulhameed said that the new product was another step towards the development of the NIRSAL Comprehensive Index Insurance (NCII) conceptualised in 2018 with the ultimate goal of agricultural insurance product development by factoring in commodity pricing parameter in the cover to be issued.
“Towards achieving the NCII, the launch of the HM-II marks an improvement to the NIRSAL Area Yield Index Insurance (AYII) which the corporation developed in 2017 and piloted in the wet farming season of the same year to significant effect, covering 17,000 farmers and 10,000 hectares with a harvest value of N3Billion.
“This latest development is a testament to the progress NIRSAL Plc is making in the agricultural insurance space, prior to NIRSAL Plc’s intervention, private underwriters were not insuring agriculture.
“However, leveraging on NIRSAL Plc’s Insurance Pillar and in collaboration with the Nigerian Agricultural Insurance Corporation (NAIC) and the National Insurance Commission (NAICOM), we have brought about the inclusion of underwriters other than NAIC in underwriting Agricultural transactions and stimulated the development of new and innovative agricultural insurance products.”
Mr Abdulhameed said that NIRSAL would not only protect farmers but will also assist Nigeria in diversifying its economy, attain self-sufficiency in food production and entrench inclusive economic growth in alignment with the Federal Government’s Economic Recovery and Growth Plan (ERGP).
Yusuf Yila, Director of the Central Bank of Nigeria’s Development Finance Department said that the CBN has already adopted NIRSAL Plc’s Area Yield insurance (AYII) products and looks forward to deploying the HM-II. He praised NIRSAL Plc for always being at the forefront of agribusiness innovation.
Mr Benjamin Agili, Managing Director REGIC, described the product HM-ll as a that product seeks to protect the small-holder farmers from farming loss during a particular farming season. This, he said, guarantees sustainability and continuity, “ensuring the farmer is able to remain in business, no matter the loss or situation.”
He thanked NIRSAL Plc for “the exceptional job being done to change the face of agriculture financing in Nigeria” and for giving REGIC the opportunity to partner with it on the HM-II.
Leonard Akah, NAICOM’s Director of Policy and Regulation, who represented Sunday Thomas, NAICOM’s Commissioner for Insurance said that in line with the Federal Government’s Financial Inclusion Strategy, NAICOM was eager to lend its support to the development of a product such as HM-II.
Mr Akah said that the partnership between NAICOM, NIRSAL PLC and REGIC to support federal government’s efforts in the promotion of agriculture and economic diversification was mutually-beneficial.