By: Africa Re
Africa Re confirms its position as leader and pioneer in the area of reinsurance in Africa by supporting an agricultural insurance project in Senegal.
As part of a project initiated and managed by the West African Development Bank (BOAD), the National Agriculture Insurance Company of Senegal – Compagnie Nationale d’Assurance Agricole du Sénégal (CNAAS) – has chosen Africa Re, the most prominent African Reinsurer, to lead the reinsurance programme of 40,000 cotton and maize farmers in Senegal, jointly with AXA CS and CICA Re.
Agriculture, a key sector of the African economy, employs 60% of the working population and accounts for 35% of the GDP. This sector is exposed to several climate-related risks such as drought or floods, which undermine food production and jeopardize food security. Until recently, projects to insure farmers against such risks in Africa were mainly micro insurance pilot projects limited to regions or villages and did not enable a real development of agriculture insurance.
With the technical assistance of FINACTU consultancy firm, BOAD and CNAAS initiated an innovative national index-based insurance project in Senegal to promote agriculture insurance in the WAEMU zone. This project is certainly innovative in Africa inasmuch as it targets all the farmers of a sector and makes positive use of the institutions of the sector. Indeed, the project targets about 40,000 farmers of the cotton sector, which is very well structured in Senegal; 5,000 of them are also maize farmers.
In order to effectively conduct the project, the BOAD and CNAAS decided to join forces with a lead reinsurer of international standing to assist in designing and pricing insurance products of the project, support CNAAS in building technical capacity in agriculture insurance and insure most of the risks of the products designed. These institutions chose Africa Re and its partners (AXA CS and CICA Re) whose competence and experience match the requirements of this significant project, which will serve as an example and will pave the way for other African countries as regards insurance of their farm products.
Hitherto, only non-African reinsurers reinsured agriculture risks in Africa. At present, Africa Re has asserted its leadership jointly with its partners, thereby taking a clear stance as leader and pioneer of African reinsurance by reinsuring agriculture and climate-related risks, which constitute a growing challenge to African countries.