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Index Insurance Feasibility Study Workshop 
in Cameroon


Photo Credit: World Bank

At the request of the Government of Cameroon, the World Bank and the IFC have conducted a feasibility study that seeks to improve the knowledge and understanding of the market opportunity for index insurance. The findings were unveiled in Douala on December 15, 2016, at a workshop jointly organized by the World Bank Group and the Association of Insurance Companies of Cameroon (ASAC). The event was another milestone for Cameroon’s agricultural sector, which is increasingly experiencing shocks due to climate change. In 2015, this sector accounted for 20% of the country’s GDP,  approximately US$6 billion, and employed 54% of the population. Even though more than 12 million Cameroonians depend on agriculture for their livelihoods, their primary means of agricultural risk mitigation are limited to risk avoidance and other informal approaches such as underinvesting in agricultural inputs.

Recognizing an opportunity in the agro-insurance space in Cameroon, the feasibility study has a primary objective of conducting value chain mapping to assess index insurance opportunities along the value chains for cotton, maize, livestock, and sorghum. It also seeks to catalyze and reinforce the development of a sustainable market for agricultural insurance products. Additionally, the findings are also expected to complement two World Bank projects in Cameroon: an Agriculture Investment and Market Development Project and a Livestock Development Project.

Another element of the study is its focus on the readiness of the enabling environment that would allow for the development of an agricultural insurance market. As part of the CIMA zone, Cameroon has broadly adopted the regulatory frameworks for microinsurance since the notion of index insurance was introduced in 2012. The sub-region received technical and financial support from the Global Index Insurance Facility (GIIF) for the regional study of microinsurance, resulting in CIMA Book 7 that allows the practice of microinsurance operations, including index insurance.

The event brought together more than 55 participants: four ministries (Finance, Agriculture, Economy and Livestock), ten local and international insurance companies, eight local and regional banks and microfinance institutions, a national research institute in agriculture, inputs providers, farmers’ cooperatives, parastatal Sodeocoton, and development partners including African Development Bank (AfDB) and the German Development Cooperation (GIZ). The workshop also served as a forum for the stakeholders to discuss opportunities and challenges for the development of an agricultural insurance market in Cameroon. Their inputs are critical to the pilot implementation of index insurance products for cotton, maize, sorghum, and livestock which will begin in 2017. The benefits of the pilot are expected to reach over 70,000 farmers and pastoralists by 2019. To ensure the pilot’s success, GIIF is committed to raising awareness on index insurance, providing financial support to lower the cost of agriculture insurance, developing data infrastructure, and building capacity of the local stakeholders.
Activity Snapshot: GIIF Training in South Africa
GIIF organized a workshop entitled "Agriculture Insurance Training" where more than 30 participants, from seven African nations, gathered in Johannesburg for two weeks in October 2016. The workshop focused on the fundamentals of index insurance and risk transfer and discussed a wide array of development-related topics ranging from product design to project management.  Click the image to the left to download the Activity Snapshot.
Participants and GIIF staff at the
“Agriculture Insurance Training" in Johannesburg, October 17-28, 2016
Multimedia
Earthquake Index Insurance (EQII)
Supported by GIIF, the International Finance Corporation (IFC) has been working with PT Reasuransi MAIPARK (national reinsurer of all special risks) to design and retail an index insurance product that protects the lending portfolios of banks from liquidity crises in the aftermath of an earthquake. This is particularly relevant to microfinance institutions (MFIs) and rural banks so they are able to continue lending to communities when funds are most needed.
World Bank Wants to Further Strengthen the Resilience of Developing and Emerging Countries


Photo Credit: World Bank

In its Topics Online article, Munich Re reported that many risks are not yet sufficiently covered by insurance in developing and emerging countries, resulting in the so-called protection gap, which is the difference between total economic loss and insured loss. Joaquim Levy, Managing Director and World Bank Group CFO, addressed the topic in a speech at this year’s Chief Risk Officer Assembly in Munich . "We are concerned about the fact that in many emerging-market countries, risk-sharing mechanisms such as insurance are not sufficiently developed in view of the significant challenges posed by natural disasters and climate risk. Financial savings and insurance are only used by about 17% of people in low- and middle-income countries, compared with 45% of people in high-income countries. Catastrophe-risk insurance penetration is even lower; usually less than 5% in most developing countries," said Mr. Levy.
 
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In Focus: New Climate in Zambia
Unlocks Insurance Opportunities

Photo: IRI


In mid September, the International Research Institute for Climate and Society (IRI) helped launch an innovative new data platform in Lusaka, Zambia that combines satellite rainfall estimates with the country’s existing network of rain gauges. The platform, developed with the Zambia Meteorological Department and through funding from NASA, is the latest to come out of IRI’s Enhancing National Climate Services (ENACTS) initiative which aims to address the persistent problem of data scarcity and lack of access to climate information products in many African countries.
 
GIIF funded the event, which brought together participants from the Zambia Meteorology Department, R4, World Food Program and the country’s insurance sector. They used the new ENACTS platform to solve index insurance design problems and identified how previously untapped expertise, products and capacities could improve each step of the index design process, including data collection, analyses and comparison of various data sources, index design and validation and index performance assessment.

 

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Knowledge Corner
On Wednesday, December 14th 2016, The World Bank and FAO hosted a webinar entitled "Agricultural Investment Funds for Development: comparative analysis and lessons-learned." Calvin Miller, Agricultural and rural finance expert and former team leader of the Agribusiness and Finance Group at FAO, and Toshiaki Ono, Financial Sector Specialist, WBG's Finance & Markets, discussed the unique features of these agricultural investment funds and how they yield positive financial return as well as development impact.
Infographic: Helping farmers understand index insurance - Guidelines for consumer education interventions

To accompany its new Paper "Helping farmers understand index insurance: Guidelines for consumer education interventions", ILO’s Impact Insurance Facility has designed an infographic that puts together guidelines for index insurance education. 

 
Insights on Mobile Network Operators as a distribution channel for microinsurance in Asia - 2016

Munich Re Foundation and Microinsurance Network have released a report that provides an insight on Mobile Network Operators (MNOs) as a distribution channel for microinsurance in Asia. "The study shows that there are an estimated 2.6 billion SIM cards activated through various carriers in the Asian region. Two Technical Service Providers (TSPs), BIMA and MicroEnsure, and eight MNOs which carry out distribution of Mobile Microinsurance (MMI) were identified in the region. The total number of lives covered, through these MNOs, stood at a total of 40.3 million by mid-2016, based on available data received through the survey. For example, in India, 53% of the subscribers to the MNO Telenor have a mobile insurance cover, whereas in Bangladesh this figure stands at 15% through Grameenphone."
About Us

The Global Index Insurance Facility (GIIF) is a multi-donor trust fund supporting the development and growth of local markets for weather and disaster index-based insurance in developing countries, primarily Sub-Saharan Africa, Latin America and the Caribbean, and Asia Pacific.

GIIF Donors



GIIF is funded by the European Union, the ACP Group of States, Japan, and the Netherlands.

The EU is the primary donor partner to the GIIF Trust Fund with a focus on the African, Caribbean and Pacific Group of States (ACP). The governments of Japan and the Netherlands are providing additional support to different regions and countries where World Bank Group operates.
Contact GIIF

Fatou Assah | GIIF Program Manager | fassah@worldbank.org

Selin Konrat | Operations Officer | skonrat@ifc.org
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