Building climate resilience in Africa

Uganda faces a twofold struggle which puts pressure on agricultural production: on the one hand, the challenging weather and climatic patterns result in prohibitive cost of insurance. On the other hand, the limited supply by banks with agriculture loans, due to the high risks involved, makes it difficult for farmers to invest and increase productivity.

In 2016, has co-hosted a Government Training Program on the role of insurance to strengthen public risk management strategies. During the training, the Swiss Re team had the opportunity to discuss sovereign risk transfer mechanisms with Munya Daka from AIC (Agriculture Insurance Consortium), a coalition of Ugandan agriculture insurance companies. This ignited the idea to bring these concepts to Uganda and subsequently Swiss Re's Agriculture Reinsurance team provided technical trainings on the subject, helping AIC develop a cost-effective approach to product development, as well as policy and claims handling. At the same time, the Public Sector Solutions team helped AIC engaging with the Ministry of Finance of Uganda. The latter agreed to provide an initial premium subsidy which has been crucial to ensure a high take up rate of the insurance product.

Today, UAIS includes various products, from multi-peril crop to poultry and livestock insurance. The scheme protects more than 250 000 farmers in Uganda, helping reduce the insurance gap in the country through a successful public-private partnership. Since its inception in 2016, the Consortium is protected by reinsurance and gets support from Swiss Re. The Government aims to expand the program to reach a larger population of farmers and replication is possible in other countries..

The creation of this new scalable insurance solution has helped build climate resilience for farmers in Africa.