Farmers urged to enroll in insurance policies to protect investments against El Niño impacts

The recent climatic phenomenon, El Niño, is prompting the urgency for farmers to take immediate steps to seek insurance protection for their investments.

Despite the rollout of insurance policies, including the Ghana Agriculture Insurance Pool, for the agricultural value chain, many farmers fail to leverage the avenues to mitigate financial hardship brought about by unpredictable weather conditions and crop diseases.

The Chartered Insurance Institute of Ghana is pushing for farmers to safeguard their investment now against the vagaries of the harsh weather as the world is predicted to further heat up in the ensuing years.

Weather and climate experts predict intense weather conditions in the coming years, exposing uninsured farmers to more threats of loss.

Despite a pool of insurance policies, farmers continue to lose out on their benefits.

The insurers are moving to strengthen insurance products for the agriculture sector to rope in more farmers to safeguard their investments.

Speaking at the annual conference of the Chartered Insurance Institute of Ghana in Kumasi, Chairman of the Insurance Awareness Coordinators Group, Wilson Teye, highlighted challenges confronting the rollout and uptake of the policies by farmers.

“We haven’t had mechanized agriculture. We depend completely on the vagaries of the weather and that is a problem. Even some of our methods, such as deliberately setting fires on farms, are issues. There is also the challenge of bring all the farmers together to understand and appreciate the need for insurance. But regardless, we have brought this to the forefront and are addressing agricultural insurance,” he said.

Agricultural insurance provides protection to key stakeholders in the agricultural production value chain in the event of crop failure ad livestock mortality due to both natural phenomena and human-induced activities.

President of the Chartered Insurance Institute of Ghana, Solomon Nii Amah-Kai Lartey, says the time is now for vulnerable large- and small-scale farmers to secure their produce.

“Make sure you have your insurance now. There is parametric insurance, which does need much assessment after a loss. Once the parameters are triggered, a claim can be made. With the emergence of El Niño, people should get insured now,” he said.

Mr. Amah-Kai also disclosed that farmers and other stakeholders along the agriculture value chain can leverage the dedicated insurance pool for subsidized products.

“The Ghana Agriculture Insurance Pool is available for agriculture stakeholders. This pool is there to ensure that agric insurance premiums are subsidized for people to be able to buy insurance,” he said.

Deputy Commissioner of Insurance, Bernard Ohemeng Baah, emphasized the importance of insurance for agriculture as he revealed that the National Insurance Commission is in its concluding stages to roll out subsidized agriculture insurance for smallholder farmers.

“Because we don’t have data, the price of insurance for farmers tends to be really high. So, many of them don’t patronize it. We are employing innovative approaches to deliver insurance to farmers at a low cost. This will help protect Ghana’s food basket and also ensure that families that depend on agriculture are not exposed to the shocks of the weather,” he said.

The AGM and educational conference of the insurers, held on the theme: “Closing the Gap: From Awareness to Action in Building an Adaptive Insurance Industry,” assembled professional stakeholders in the sector to leverage the opportunity in building a resilient insurance industry.

Ghana’s insurance industry, despite making considerable gains, is still confronted with significant gaps between public awareness, insurance ownership, and effective financial protection.

In 2024, Ghana’s insurance penetration stood at approximately 1.0 per cent of the gross domestic product (GDP). The International Financial Reporting Standards report 0.63 per cent associated with insurance service revenue. But insurers only paid approximately 3.6 billion cedis in claims during 2024.

Mr. Nii Amah-Kai noted that the challenge must extend beyond just raising awareness but must extend insurance protection to more people and businesses and also to ensure that the experience of purchasing and using insurance justifies the public’s confidence in the insurance cover.

“We need to make sure that the awareness we are creating is translating into real insurance take-up. This conference seeks to find answers to whether or not the awareness is properly done and how it is benefiting the Ghanaian people,” he said.

Mr. Wilson Teye says people’s trust and confidence must be heightened to increase their enrolment in insurance policy avenues.

“The bedrock of insurance is payment of claims. If people do not trust that their claims will be paid and on time, they naturally wouldn’t want their money buying insurance. The objective is to address the mistrust and get regulatory intervention,” he said.

As part of the annual activities, the association also visited the T.I. Ahmadiyya SHS in Kumasi to sensitize students on the job prospects in pursuing study programmes in insurance and actuarial science.

The association also invested in the digital infrastructure of the school with the donation of printers and learning projectors to aid academic work, while also providing some souvenirs from member insurance companies.