Collaboration Between the Public and Private Sector Players to Reach Scale in Africa

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Collaboration between the public and private sector players to reach scale in Africa
Knowledge Session at the ICII 2022 in Jamaica

The GIIF Program hosted a knowledge exchange session at the 2022 International Conference on Inclusive Insurance, held in Jamaica between 24-28 October 2022. The International Conference, hosted by the Munich Re Foundation, the Microinsurance Network and the Insurance Association of Jamaica, was attended by over 400 experts from 50+ countries. The objective was to offer a platform to discuss and identify ways of accelerating growth and economic viability in inclusive insurance for emerging markets.

In this conference, the GIIF program hosted a session on agriculture index insurance focusing on the role of partnership in scaling up climate insurance. Joining the panel were four experts: Two regulators and two (re)insurance practitioners. The panelists were: Yizaso Musonda, Manager, Market Development, Pensions and Insurance Authority, Zambia; Dr. Grace Muradzikwa, Commissioner at Insurance and Pensions Commission-IPEC, Zimbabwe; Isaac Magina, Agriculture Underwriting and Marketing Manager, Africa Re; and Humphrey Mulele, Manager, Agriculture Specialties, Mayfair Insurance, Zambia, respectively. The session was moderated by our colleague Sharon Onyango, Financial Sector Specialist, IFC Financial Institutions Group Advisory Services (Africa). The panel, offering regulatory and insurance market perspectives, discussed the current status of collaborative efforts made to develop sustainable and scalable agriculture insurance markets in Africa. Panelists also shared their experiences and brainstormed ways in which regulatory procedures, market conditions and policy aspects could enable the development of simple, accessible and impactful insurance products. “The event was a wonderful eye opener... I was exposed to this whole inclusive insurance ecosystem which I was not aware of. There are lots of opportunities that we as regulators can tap into to develop our markets so that we do not leave anyone behind” says Dr. Muradzikwa about the event.

Through this panel, the team wanted to highlight the need for collaboration between public and private sector players to increase agricultural insurance coverage and improve resilience against the effects of climate change. The session also highlighted various aspects of best practice in market development, lessons learned and potential aspirational regulatory and market supervisory models. Accordingly, demand and supply incentives, customer-centric solutions, risk pooling, investment in capacity, and technology adoption were all highlighted during the Q&A session as all are important in supporting scale, and balancing both the demand and supply sides of insurance offerings.

Panelists highlighted their collaborations on the ground (e.g., in Zambia where PIA and Mayfair work closely with IFC, GIZ, Musika, WFP, Financial Sector Deeping Zambia, the Ministry of Agriculture, and in Nigeria between Africa Re and NAIC, ILRI, Acre Africa, among others). They also highlighted educational and literacy-related programs that they are conducting with farmers for product uptake. Ms. Musonda highlighted: “The major gaps in the region are definitely around financial literacy and insurance information, the farmers who are the ultimate beneficiaries have a very low understanding of insurance products let alone parametric insurance. Capacity of insurers to underwrite these products continues to be a challenge and this has compounded the reliance of insurers on 3rd parties to design these products.”

As part of key messages, Ms. Musonda added: “We want to see insurance education being prioritized by insurance players as well as long term capacity development within insurance companies.” Dr. Muradzikwa reiterated the importance of consumer education and awareness and added: “We need to encourage the development and design of simple products that speak to consumer realities.”  In addition, Ms. Onyango concluded:“While there is increased evidence of proactive and consultative approaches to market development, there is still room for more collaboration to address persistent issues such as lack of high-quality data, basis risk management, skills development, consumer education, innovation at low/limited cost to farmers, and cost-effective claims management.”

For more information on the Conference, please watch the introductory video here.

Photo: Knowledge session: Collaboration between the public and private sector players to reach scale in Africa (From left to right: Ms. Sharon Onyango, Mr. Humphrey Mulele, Dr. Grace Muradzikwa, Ms. Yizaso Musonda, Mr. Isaac Magina).