As climate shocks increasingly threaten livelihoods across Africa, the need for innovative risk transfer solutions has never been greater. Against this backdrop, Africa Re, in partnership with IFC, convened a three-day Agriculture and Climate Insurance Workshop from November 4–6 to explore strategies for strengthening agricultural resilience and expanding insurance coverage for farmers and agribusinesses across sub-Saharan Africa.

The event brought together insurers, reinsurers, government agencies, development partners, and insurtechs to share knowledge, discuss challenges, and strategize on building a sustainable agriculture insurance ecosystem that strengthens the resilience of smallholder farmers and MSMEs.

The workshop opened with an address from Phocas Nyandwi, Regional Director of the Nairobi Office at Africa Re, who stressed the timeliness of shifting the agriculture insurance landscape away from donor-led pilots toward a sustainable line of business that protects farmers and enhances food security. He highlighted Africa Re’s commitment to working collaboratively to co-create a thriving agriculture and climate insurance market across the continent.

Phocas Nyandwi, Regional Director Nairobi Office at Africa Re delivers the opening address 

Sanjay Kalpage, SME Practice Group Lead at IFC, delivered opening remarks virtually, highlighting the partnership between Africa Re and IFC and how it aligns with broader World Bank Group objectives, including the AgriConnect Initiative, to transform smallholder farming, create jobs, and strengthen global food security. Kalpage referenced IFC’s recent launch of two innovative insurance products in northern Nigeria: Index-Based Livestock Insurance and Animal Encroachment Insurance, developed in collaboration with Africa Re, Dalili Advisors, and other partners.

Isaac Magina, Manager of Agriculture Underwriting and Marketing at Africa Re, set the scene with a review of the business case for agriculture and climate insurance. He noted that despite agriculture contributing 15–30% of GDP across Africa, insurance penetration remains below 1%, except in South Africa, where it is around 30%. Magina highlighted key barriers to scaling the agri-insurance market, including data gaps, trust issues, distribution challenges, and misaligned institutional priorities. These barriers underscore the importance of a clear value proposition as a key attribute of a strong business case for stakeholders.

Three-pronged value proposition for agriculture insurance:

Risk Transfer: Although traditional coping mechanisms such as farm diversification and drought-tolerant crops exist, insurance can complement these methods.

Credit Transfer: Bundling insurance with agricultural credit helps strengthen relationships between farmers and banks, improving access to loans and other financial services.

Partnerships and User Ecosystems: Digital platforms and community engagement enhance accessibility and trust in insurance products.

The workshop also featured presentations from Allianz Re on global agriculture insurance trends, emphasizing Africa’s untapped market potential. The Kenya State Department for Agriculture and Livestock presented the De-Risking, Inclusion and Value Enhancement (DRIVE) project, highlighting subsidized area-yield index insurance for smallholder farmers and the role of youth mobilizers in increasing outreach, trust, and adoption of agri-insurance among smallholder communities.

Sharon Onyango, Industry Specialist and Program Lead, IFC outlined IFC’s approach to developing sustainable, inclusive insurance markets through investments, advisory services, and partnerships. The presentation included case studies such as the collaboration with social enterprise One Acre Fund to develop innovative risk transfer solutions and support the bundling of insurance with farming input credit to boost the resilience and incomes of millions of farmers.

Under this collaboration, IFC and One Acre Fund partnered in Malawi and five other countries: Burundi, Kenya, Nigeria, Rwanda, and Tanzania, to develop and roll out climate insurance products tailored to the needs of smallholder farmers, particularly those in low-income market segments. The project facilitated insurance payouts to 44,000 farmers affected by Cyclone Freddy in February and March 2023, helping them recover more quickly in the aftermath of this unexpected climate shock.

A key presentation on the Experience Account (EA) concept introduced a partial stop-loss reinsurance facility designed to protect insurers’ portfolios and incentivize the growth of agriculture insurance. Representatives from Leadway Insurance and Mayfair Insurance, which participated in an IFC–Africa Re pilot held from 2017 to 2020, shared how the experience strengthened their technical capacity and confidence in offering agriculture insurance products.

Experience Account (EA): A risk-sharing tool that offers local insurers quasi-reinsurance support during catastrophic years. This mechanism aims to help insurers manage claims volatility beyond traditional reinsurance coverage.

In a lively roundtable panel discussion, representatives from CIC Insurance, Rex Insurance, and Kenya’s Ministry of Agriculture explored challenges related to farmer communication, demand generation, and bundling insurance with credit. Panelists stressed the importance of investing in product development, claims processing efficiency, and digital tools, while leveraging community-based youth mobilizers for outreach.

Key Takeaways

The workshop encouraged continued collaboration, innovation, and data-driven approaches among insurers, reinsurers, governments, development institutions, and farmers as essential elements for building resilient and scalable agriculture insurance systems. Additional key takeaways include:

• Africa’s agriculture insurance market holds significant untapped potential, but scaling requires innovative products, trust-building, and strong partnerships.

• Bundling insurance with credit and inputs, leveraging digital platforms, and promoting youth-driven community engagement can improve uptake among smallholder farmers.

• Pilots and experience-based facilities such as IFC’s Nigeria Inclusive Insurance Project and the 2017 Experience Account pilot provide valuable lessons for product design, technical capacity building, and commercial sustainability.

As climate risks intensify, knowledge-sharing and partnerships offer a roadmap to protect livelihoods, enhance food security, and drive the sustainable growth of Africa’s agri-insurance market.

By Sameera Ahmad Aideed Hassan and Sharon Onyango