Freedom Mashava, Visuals Editor 
ZIMBABWE’S uptake of agricultural insurance remains subdued despite the sector being one of the major drivers of the economy, an industry official has said.
Zimbabwe’s economy is agro-based, with agriculture contributing about 17 percent to the country’s gross domestic product and about 60 percent of raw materials to the manufacturing industry.
Tendai Karonga, the Insurance Council of Zimbabwe executive director said that a lack of insurance products that address the needs of small-holder and subsistence farmers was among factors contributing to the low uptake.
“There is a lack of insurance products that address the needs of small-holder and subsistence farmers who are the majority in Zimbabwe following the land redistribution exercise,” Karonga told an Insurance and Pensions journalists’ mentorship virtual workshop in Harare.
He said mistrust in insurance services, reliance on traditional self-insurance in risk and loss management, as well as thin profit margins in the sector “particularly for small scale commercial and subsistence farmers,” have also kept uptake low.
“Despite the agricultural sector being one of the major drivers of the economy, its consumption of insurance services is very minimal contributing 1,45 percent to the gross premium written (GPW) for the period January to June 2020, which is an increase of 370 percent in real growth compared to the same period in 2019. 290 percent of the growth is attributed to hail insurance for the tobacco crop” he said.
Main consumers of agricultural insurance are commercial and contract farmers.
The Insurance and Pensions Commission (Ipec) is also working on a framework to introduce weather index-based agriculture insurance aimed at boosting the uptake of agriculture insurance.
The framework encourages insurers to offer community-based agricultural insurances for the subsistence and small-scale farmers taking advantage of the economies of scale concept.
Meanwhile, local short-term insurers’ GPW increased by 689,18 percent during the period January to June 2020 compared to the same period in 2019.
In real terms, however, after adjusting for inflation of 737,30 percent, the GPW declined by six percent and assets by five percent according to the Ipec 2020 second quarter report.
newsdesk@fingaz.co.zw
