A new insurance product to help when crops fail
GIZ joins forces with Allianz and SDC to insure five million farmers in Asia
Bonn / Eschborn. More than five million small-scale farmers and their families will in future be able to protect themselves against ruin when their crops fail, thanks to insurance policies. The policies will be available in seven countries. In an initial phase, around 30 million people in Bangladesh, Cambodia, India, Indonesia, Thailand, the Philippines and Viet Nam will be able to enjoy greater economic security. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH – on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) – and Allianz Re have joined up with the Swiss Agency for Development and Cooperation (SDC), in a project that bundles the three organisations’ complementary strengths. The joint venture is initially set to last three years.
The product is new, and was only made possible thanks to the collaboration. State-of-the-art satellite technology and new growth models supply data that allow crop volumes to be estimated accurately. These estimates then serve as the basis for calculating the extent of any damage, and therefore also the amount of compensation to be paid in the event of a partial crop failure. Michael Roth, responsible at GIZ for developing and introducing the insurance system, explains: 'In this development, we're treading a fine line. The insurance policies must be affordable for our potential customers, but in the event of a loss, the compensation sum must be sufficient to provide genuine assistance and protect them from slipping into absolute poverty.'
In the joint venture, GIZ will use its long-standing presence in the countries concerned to bring all the parties involved together at the same table. One key task will be to develop the necessary expertise among the people responsible in the project countries. GIZ will also support the approval process for the insurance products with the relevant state authorities, and supply the population with comprehensive information about the policies. 'When marketing the new policies we will work closely with the government bodies responsible, support local insurance companies and work with financial institutions, merchandise cooperatives and other actors with close links to the target-group,' says Roth.
A second phase will see the insurance products marketed in other Asian countries as well as in Africa and South America. Besides GIZ, Allianz Re and SDC, the project also involves inputs from sarmap, the Swiss service provider for earth observation, and the International Rice Research Institute (IRRI).
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is a federal enterprise with worldwide operations. It supports the German Government in international cooperation for sustainable development and in international education work. GIZ supports people and societies in shaping their own futures and improving living conditions.