Ngano of Lazy Hare and the drought
As part of the latest International Conference on Inclusive Insurance (ICII) with around 1000 participants from over 120 countries discussing how to make insurance more inclusive, and during Day 3 when attendees where discussing the Challenges of Reaching the Client, the Director of Hollard Mozambique ( Israel Muchena) brought up important lessons learned from successful education programs, mentioning the Ngano of Lazy Hare and the Drought story developed for awareness of insurance based on traditional Mozambican tale. In the introduction to risk through an ancient African oral story (Ngano)
GIIF worked with MITADER to conduct an Index Insurance Feasibility Study that consists of a value chain analysis for 4 priority crops (beans, cotton, maize, and cashew nuts). Results from the study where disseminated during a stakeholders workshop in Maputo in August 2018, shedding light on farmers’ willingness and ability to pay for insurance premiums as well as identifying key aggregators through which index insurance products could be distributed in the country. GIIF is providing financial support to Hollard Mozambique to help the firm expand its agricultural insurance business line. As
GIIF Country Profile: Mozambique
A newly designed Global Index Insurance Facility's Country Profile for Mozambique is available for digital viewing. The document contains an overview of GIIF's project in the country with Partner Holllard Mozambique.
Insurers are trying to control costs and reach scale in agriculture insurance by designing meso-level insurance policies that cover large numbers of farmers associated with an aggregator (e.g. agribusiness firm, financial institution, input providers). Products are priced using a portfolio pricing model, meaning that the price is calculated on the basis of the whole group. This avoids the cost of assessing individual plots.A project in Mozambique supported by GIIF and implemented by reinsurance broker, Guy Carpenter, used a meso-level approach to cover cotton farmers through a public-private
In Mozambique, agriculture accounts for approximately 32% of GDP and involves over 81% of the population. Yet, only a fraction of Mozambique’s potentially arable land is currently under cultivation. This lack of arable land usage is in large part due to risk aversion on the part of farmers and financial institutions since natural hazards such as droughts and floods regularly affect agricultural production. Up until recently, no market for agriculture insurance products existed for smallholder farmers in Mozambique leaving poor farmers in the country highly exposed to natural perils. This hinders their access to third-party capital, discourages the use of new farming techniques/technologies and overall hampers the ability of smallholders to exit poverty. As a direct result of a Local Capacity Building grant awarded to Guy Carpenter in 2011 from the World Bank Group's GIIF, the firm ─ in conjunction with the Asia Risk Centre Inc., Hollard Mozambique and EMOSE ─ designed, developed, and deployed two agriculture weather index insurance pilots in Mozambique in late 2012. The index-based insurance products covered maize farmers in the district of Chimoio and cotton production in the districts of Lalaua and Monapo.