Climate change is a major threat to African farmers, and insurance can be a game changer for them. In Kenya, the World Bank’s One Million Farmers Platform (OMFP) has helped to foster disruptive innovations that are increasing uptake of agriculture insurance solutions. Insurance company Pula is providing a lifeline for many African farmers by helping them cope with the effects of climate change.
Agricultural insurance access and acceptability in Africa is still low, but it is considered an important tool for managing risk associated with climate change. Index insurance is one way to bring agricultural microinsurance to scale in Africa, as it allows farmers to insure their crops without having to pay large premiums. Agricultural insurance contracts also allow farmers to insure all eligible acreage of a crop planted in a particular county.
In Malawi, one of the largest crop index insurance payouts ever on the African continent amounted to US$2.4 million, providing much-needed relief for farmers who rely heavily on their crops for income and food security. ACRE Africa is another example of an innovative partnership that provides index insurance services across East Africa, covering around 1.7 million smallholder farmers. Pula is also breaking through crop insurance barriers by offering affordable premiums so that more African farmers can benefit from this protection against climate risks.
Insurance can be a powerful tool for mitigating the impacts of climate change on African farmers and ensuring their livelihoods remain secure despite extreme weather events or other unexpected losses due to natural disasters.