Agriculture Needs Insurance Packages — Senior Minister
Climate change is an issue that would continue to be on the insurance sector’s radar, as long as the climate keeps warming, sea levels keep rising and storms keep intensifying.
Risk of this sort is what has barred many investors from exploring the business of Agriculture Insurance, in Ghana and in Africa as a whole.
Though the risks are real, the Senior Minister, Mr Yaw Osafo-Maafo has charged insurance businesses in Ghana to take a leap of faith and extend insurance packages to the agricultural sector.
The minister made this call when he delivered his keynote address at the opening ceremony of 45th Conference and Annual General Assembly of the African Insurance Organisation, held in Accra, on Monday.
“Talk about insurance in Agriculture, why are all insurances companies running away from it? It is because of the unreliability of our whether forecast,” He indicated.
According to him, the liability in Agriculture—which is the inability to determine the risk should no longer be an issue adding that science has made it easier to forecast the weather in recent times.
“We should therefore begin to look at the agriculture financing…with some computation and analysis from various angles we can put our finger on the risk that goes into agricultural financing.
“Africa has the land—quality land, we have a youthful population. We need to use the obvious facilities to the advantage of farmers,” Mr Osafo-Maafo stressed.
Narrowing his appeal to government’s vision of redefining the destiny of Ghana by breaking the cycle and mentality of dependency, the senior minister said Ghana requires leverage for its natural resources in order to move towards rigorous industrialisation.
According to him, deepening the industries especially the financial sector which insurance is a major component is critical.
“The financial sector is very critical by the government and I see us building around the insurance business because they are the masters of risk takers,” Mr Osafo-Maafo noted.
The Senior Minister further stressed the need for collaboration on all side in other for insurance penetration to move from its pitiable 2% rate to a double digit.
First of all, Mr Osafo-Maafo argues that African nations must collaborate to increase their capacity and to ensure that the insurance business is not snatched from the hands of indigenous businesses by foreign investors.
“Our capacity would be bigger and we can take up a bigger risk and that would retain our premium payment within the region otherwise we would have to sublet this to those outside and those outside are ready to take the business from us,” he stressed.
The minister also called for collaboration between banks and the insurance companies.
“The banks should also come in and insist on an insurance cover before they grant loan to certain facilities…if you do that, you will improve penetration,” he explained.
On government’s partnership with insurers, Mr Osafo-Maafo said he would push for a policy that would compel government to insure all of its assets.
“As I speak, all government vehicles are not insured…The government has a lot of asset…if the government decides to take insurance cover for some of the assets; it will increase the penetration of the insurance business,” He noted.
The Tenet of the AIO is inter-African cooperation geared at developing a healthy and strong insurance industry in Africa.
According to the President of the AIO, Alhaj Kaddunabbi Ibrahim Lubega, the annual conference was an opportunity for insurance companies in the region to come together and make resolutions that would address challenges facing the industry.
Currently, the association counts over 360 members with 16 of them from nine overseas countries.
The theme for this year’s conference is “Innovation, Risk and Future Insurance in Emerging Markets,” and would run from May 6 through to May 9, 2018.
By: Grace Ablewor Sogbey/ email@example.com