In Zambia, 53% of the working population are employed in the agricultural sector. Changes in weather patterns such as delays on rainy seasons, more frequent drought periods and excessive precipitation can lead to partial or even total crop losses that smallholder farmers cannot bear.
The agricultural company NWK AgriServices provides its cotton contract-farmers with access to weather index-based insurance, fostering sustainable business opportunities for agricultural companies. The Global project carried out by GIZ supports the further development, dissemination and expansion of the contract farming insurance model and strengthens the market for climate risk insurance solutions for smallholder farmers in Zambia.
The Greater Accra Metropolitan Area (GAMA) is Ghana´s economic hub and is exposed to floods almost every year. Given that the impact of flooding is often catastrophic, there is an urgent need to enhance GAMA’s resilience and move to a proactive disaster risk management approach.
The strategic alliance between GIZ and Allianz Re together with local partners developed and aligned risk-transfer solutions as part of an Integrated Disaster Risk Management (IDRM) approach for municipalities and their public assets with the aim of increasing urban resilience.
The Greater Accra Metropolitan Area (GAMA) in Ghana experiences perennial rain events on an almost annual basis. This heavy rainfall causes significant economic and physical losses to the Accra region.
Developing an appropriate insurance product is thus vital in coping with these flood risk damages. It is one of the key parts of the integrated flood risk management project in GAMA — a joint develoPPP.de project by GIZ and Allianz Reinsurance. As a part of this project, an indemnity-based flood cover for three municipalities has been designed. It covers the aggregated losses of all insured assets managed by a municipality that are hit by a severe single flood event. The design of this product can be easily adapted to different municipality’s needs, if sufficient portfolio and loss data as well as the willingness to invest in risk reduction and preparedness activities are available.
Design of a Flood Cover Insurance for Public Assets in Ghana
SMEs in Morocco are vulnerable to a broad range of extreme weather events such as floods, severe rainfalls, heatwaves and droughts, which become more frequent in warmer climate conditions.
The joint develoPPP.de project by GIZ and Allianz Reinsurance developed integrated solutions for the management of climate risks, including prevention measures and risk transfer solutions, and enabled SMEs to reduce their overall risk exposure. The industrial zone in Aït Melloul was selected as a pilot zone for the project due to its historical exposure to flash floods which have caused significant financial losses. This industrial zone hosts approximately 300 enterprises, most of which are SMEs operating in the food processing industry.
Developing Climate Risk Management Approaches for SMEs in Morocco
Climate change contributes to increasingly frequent and severe extreme weather events, causing economic downturns, and reducing food security and socioeconomic stability in climate vulnerable countries like Thailand and Egypt. Estimating climate and disaster risks and their impacts on macroeconomic (e.g., GDP, employment) as well as non-monetary indicators (e.g., access to health, education and mobility) still faces various challenges, making comprehensive strategies for (financial) protection against these risks difficult.
The aim of the ERA project is to provide the government partners in Thailand and Egypt with an enhanced risk assessment for the development of climate change adaptation and, subsequently, climate and disaster risk financing strategies. The activities of this project include a comprehensive risk analysis for specific sectors and populations, identifying adaptation measures and advising on risk retention and transfer instruments.
Enhancing Risk Assessments (ERA) for Improved Country Risk Financing Strategies
The bilateral GIZ project FortaleceRES aims at strengthening the resilience of the vulnerable rural population in Eastern Paraguay with a focus on the two districts of Caazapá and Caaguazú.
The agricultural sector is a key segment of the Paraguayan economy, representing 30% of gross domestic product, 40% of exports, and the source of employment for a large majority of the rural population. Due to the country’s subtropical temperate climate, characterized by a rainy season in summer and a dry season in winter, it is exposed to harsh impacts of climate change. FortaleceRES is working with political key actors on the national and regional levels, strengthening economic resilience by creating non-agricultural income opportunities, building environmental resilience by promoting soil conservation and fertility measures, as well as reducing social vulnerability through an increased access to insurance products.
Strengthening the resilience of the vulnerable rural population
The last two decades saw a surge in policy interventions, innovative technologies, and new institutional approaches that spurred the growth of agricultural insurance programs in low- and middle-income countries (LMICs), where millions of smallholder farmers do not have a financial safety net.
For more than 30 years, GIZ has been working with its partners on inclusive agricultural insurance projects around the world, from regulation and implementation to financial literacy and market development. GIZ has thus conducted a first stocktaking and analysis of this development in 2016 and repeated the exercise in 2020/2021. This report provides an update of the state of agricultural insurance in these countries, as well as the policies, technologies, and innovations currently shaping it.
Innovations and emerging trends in agricultural insurance for smallholder farmers – an update
The Inclusive Insurance Factsheet Series, developed by the “Global Initiative for Access to Insurance”, hosted by GIZ, highlights how insurance as a tool contributes towards meeting the needs of vulnerable individuals, households and micro, small and medium-sized enterprises (MSMEs) in developing countries and emerging economies.
This factsheet explains how parametric insurance and the different types of extreme weather insurance work, it presents examples on existing insurance solutions and recommends areas of intervention for international development cooperation.
Managing Climate Risk with Extreme Weather Insurance – Inclusive Insurance Factsheet
