As part of initiatives to boost food production and ensure steady 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 insured farmers against losses from bad weather, pest outbreak, disease outbreak, fire outbreak and permanent disability or death of the farmer.
NIRSAL has unveiled an insurance called the Hybrid Multi-Peril Crop Indemnity-Index Insurance (HM-II) for the farmers.
The weather vagaries cover low and high rainfall, early and late season dry spells, lightning, hailstorms and thunderstorms.
The new product, launched at NIRSAL’s Head Office in Abuja, is the 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.
NIRSAL’s Managing Director/CEO, Mr Aliyu Abdulhameed, who spoke during the launch event, said 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 said 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.
“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,’’ Abdulhameed explained.
According to him, 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 N3 billion.
In addition to developing new innovative insurance products along the entire agric value chain, NIRSAL Plc is driving the enlightenment of different categories of agric value chain actors on agric Insurance and training insurers and risk officers on innovative agric Insurance product design and farm/agribusiness assessment.
Abdulhameed said: “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,” he said in a statement.
It was signed by Anne Ihugba, the Head, Corporate communications, a copy of which was emailed to Persecondnews.
Specifically, NIRSAL Plc has been able to crowd in private insurance companies into the Agric insurance space via the formation of a consortium of 4 insurance companies in 2017 which has now grown to 10 insurance companies- including REGIC – in the space of three years.
In his remarks, Mr Yusuf Yila, the Director of CBN’s Development Finance Department, said the apex bank had already adopted NIRSAL Plc’s Area Yield insurance (AYII) products, adding that it will deploy the HM-II.
He lauded NIRSAL Plc for being at the forefront of agribusiness innovation and urged the company to continue on its upward trajectory.
Yila expressed confidence that NIRSAL Plc will continue to play a key role in the development finance functions of the CBN.
Also speaking on the occasion, Mr Benjamin Agili, the Managing Director/CEO, REGIC, described HM-II as a product that protects the smallholder farmers from farming loss including disability during a particular farming season, saying it 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.
On his part, Mr Sunday Thomas, NAICOM’s Commissioner for Insurance/CEO, who was represented by Mr Leonard M. Akah, NAICOM’s Director of Policy & Regulation, said in line with the Federal Government of Nigeria’s (FGN) Financial Inclusion Strategy, NAICOM was eager to lend its support to the development of a product such as HM-II.
He said in support of the Federal Government’s efforts in promoting agriculture and economic diversification, partnerships such as the one between NAICOM, NIRSAL PLC and REGIC- a partnership he described as visionary- have become imperative.