Achmea explores insurance for Agrics farmers

While insurance could be a valuable risk management strategy for smallholder farmers, in East Africa the uptake of insurance products remains low. ICS asked Achmea Foundation to explore the feasibility of several insurance products (including crop and life insurance) to be offered as part of the products and services portfolio of ICS’ social enterprise Agrics. Agrics provides quality agricultural inputs and agronomic services on credit to smallholder farmers in Kenya and Tanzania.

In December 2015, Achmea Foundation agreed to support Agrics with a EUR 200,000 loan to scale-up with an additional 3,000 farmers and a EUR 100,000 grant for the development of video-based training and other capacity-building activities. In addition, Achmea Foundation agreed to provide insurance expertise through the voluntary deployment of Achmea employees.

The challenges of smallholder farmers
Smallholder farmers face many constraints, including limited availability of quality agricultural inputs, a lack of modern agronomic knowledge and difficulties in market access. For smallholders engaged in rain-fed agriculture, weather risks (usually too much or too little rain fall) can cause severe set-backs. The Agrics input credit already provides tremendous value by providing easy access to quality inputs and agronomic capacity building. The provision of insurance products tailored to their needs would be another big step in reducing the challenges of vulnerable farmers.

Insurance tailored to smallholder needs
Despite the added value that insurance may provide, most smallholders are unaware of the available products, do not understand them, or simply think they are too expensive. There is also a general distrust of financial institutions. Achmea and Agrics are looking specifically into what products would work particularly well for the Agrics farmers and how these could be adopted. Among the products that are being explored are crop insurance, life insurance and income protection insurance.



Arjen van Iwaarden and Tom Schouwenaar from Achmea