Agricultural Insurance: NIRSAL, Royal Exchange launch Product

…Product will protect farmers from bad weather risks and losses

By Danlami Nmodu
In a move that will have a significant positive impact on agricultural productivity and assured income for farmers at this challenging time, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) in collaboration with Royal Exchange General Insurance Company (REGIC), has developed the Hybrid Multi-Peril Crop Indemnity-Index Insurance (HM-II).

According to a statement by Anne Ihugba Head Corporate Communication, NIRSAL Plc, the new product, launched at NIRSAL’s Head Office in Abuja, is an outcome of NIRSAL’s longstanding commitment to the development of innovative agricultural insurance products and expanding coverage for agricultural lending across the entire agricultural value chain.

It is designed, the statement said, to protect farmers from losses during a planting season caused by bad weather (low & high rainfall, early & late season dry spells, lightning, hailstorms and thunderstorms), pest outbreak, disease outbreak, fire outbreak and permanent disability or death of the farmer.

A key advantage of the HM-II is that in cases 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.

The development of HM-II is in accordance with NIRSAL’s mandate to de-risk Agriculture and facilitate the flow of finance to the sector and aligns with the organization’s target of increasing distribution of existing and new Agric insurance products to 3.6 million farmers nationwide by 2026, of which, NIRSAL Plc has already reached a milestone of 1,476,289 smallholder farmers.

NIRSAL’s Managing Director/CEO Aliyu Abdulhameed, who spoke during the launch event, revealed that the HM-II was piloted during NIRSAL’s participation in the Central Bank of Nigeria’s (CBN) 2019 Anchor Borrowers’ Programme (ABP) Wet season farming.

He added that the new product is another step towards the development of the NIRSAL Comprehensive Index Insurance (NCII) conceptualized in 2018 with the ultimate goal of Agric 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 season farming of the same year to significant effect, covering17,000 farmers and 10,000 hectares with a harvest value of N3billion.

Abdulhameed continued: “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.”