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Digitization of Agriculture Insurance through Parametric solutions

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After the digital session held in December on the topic of “Vaccine Economics, Trade, China and Growth in Africa” with Ludovic Subran, Chief Economist at Allianz SE, Allianz Africa has today held a second webinar on “The Digitization of Agriculture Insurance Through Parametric Solutions” in partnership with Allianz Re.

As Allianz prepares to expand its presence in the East African insurance market –
building on a solid foundation in Kenya and with the acquisition of the majority of
shares in Jubilee General Insurance Company in Kenya, Tanzania, Uganda,
Mauritius and Burundi – this event is the second of a series aiming at sharing with
stakeholders pan African solutions that the Allianz Group can offer through its
footprint in Africa, by extending to the continent its expertise as a worldwide
insurance leader.

Allianz Africa brought together agriculture and insurance experts such as Reto
Schneider, Regional Head of Agriculture at Allianz Re, Lovemore Forichi, Senior
Underwriter of Agriculture at Allianz Re, Gregoire Tombez, CEO of WARM
Consulting Group Ltd and Co-founder of Green Triangle, Erastus Ndege Ochieng,
Asset Manager, Agriculture Underwriting at Africa Re, Omondi Kasidhi, Head,
Sustainable Agriculture Sourcing of Diageo PLC and Delphine Traore, COO of
Allianz Africa, to discuss the topic.

“There is an ever increasing need to invest in agriculture, given the vital importance
of agriculture as a food source, especially in view of the increase in global
population”, declared Delphine Traoré, to explain the interest of Allianz Africa for sustainability in the agricultural sector. Indeed, agriculture production makes up a
substantial portion of the continent’s GDP in Africa, yet only a small portion of the
producers are insured. Raising awareness of the vital role that agriculture insurance
plays in sustaining agricultural production is a key step to increasing insurance
penetration in the sector. Delphine added: “Allianz Africa aims to contribute towards
closing the protection gap and position itself as a leading agriculture (re)insurance
provider on the continent.’’

In addition, climate risks increase the need for investments to make agriculture more
resilient, following the panel’s experts. They agreed that the development and
commercialization of agriculture requires financial services that can support. To this
end, agricultural insurance is strategically important for eradicating extreme poverty,
boosting prosperity and protecting livelihoods.

In 2020, the insurance industry recorded a cumulative premium of approx. 300mn
USD from agricultural insurance. The Southern and Eastern regions of Africa
contributed more than 80% of the recorded premium.

Eastern Africa recently recorded an improvement in its trajectory. Reto Schneider
stated that “the agricultural sector in the insurance industry could reach the potential of 1bn USD within 10 years, provided that penetration can be substantially

During the webinar, parametrics solutions were presented as the direction for the future. They bring a number of advantages such as high accuracy with state-of-the-
art satellite information, hybrid products to address additional perils, increased efficiency through fully paperless processes, fast and automated payouts possible,
high level of traceability, combination with loans and integration of the value chain.

Despite certain limitations, “technology is closing the gap between indemnity and
parametric crop insurance and allows to get the best of both worlds in a single
product”, Gregoire Tombez, CEO of WARM Consulting Group Ltd and Co-founder of
GreenTriangle stated.

To have a reliable parametrics system that provides efficient solutions, the panel
emphasized the necessity to bring significant improvements through product
suitability, affordability, value chain efficiency, distribution, information and training.

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