Promoting climate risk insurance and climate risk information in the agricultural sector

Project description

Title: Climate resilience through risk prevention and innovative climate risk insurance
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Sambia
Lead executing agency: Ministry of Agriculture, MoA
Overall term: 2020 to 2022



Extreme weather events such as drought and heavy rainfall threaten the livelihoods of many people in Zambia. Every year, around 11 per cent of the population is affected by drought. Estimates indicate that this figure will rise to 25 per cent by 2050.

Although more than half of all Zambians are dependent on farming, the sector only accounts for six per cent of gross domestic product (GDP). While economic growth is strong in some parts of the country, it does not extend to rural areas, where the poverty rate is three times higher than in the cities. Small farmers are especially affected by climate risks, given that they have little access to capital, financial services and weather information.

Climate risk insurance helps to hedge against risks in agricultural production, but it is not widespread in Zambia. In addition to a lack of insurance products, there is also insufficient knowledge and limited demand for these services. The low uptake of climate risk insurance and poor dissemination of information on climate risk is a result of shortcomings on the supply and demand side.

In Zambia, climate risk insurance has so far largely been provided via the Farmer Input Support Programme (FISP), which can only be accessed through a state-subsidised programme for agricultural actors. Private sector business models for climate risk insurance have mainly covered the cotton industry. Although climate risk information, such as weather forecasts, is prepared and disseminated in the country, it largely fails to reach people working in the agricultural sector.

So far, small farmers have shown limited demand from for agricultural and weather insurance, as they are often unfamiliar with such products. Other types of insurance are not widely used, either. Moreover, smallholder households often lack the financial resources needed to pay insurance premiums, especially before the start of a new agricultural season.


Agricultural actors have better access to private-sector climate risk insurance and information on climate risk.



The project takes a private sector approach to support the market for climate risk insurance and the dissemination of climate risk information. It builds on the results achieved to date in the InsuResilience project and aims to consolidate and secure this success in the long term.

Through a capacity building strategy, the project supports the ability of individuals, organisations and society as a whole to act.

The project offers training to employees of insurance companies, brokers and governmental institutions in the area of climate risk insurance and to selected actors involved in providing climate risk information. 

Companies and government institutions receive advice on integrating insurance into their business and developing sustainable implementation plans.

At a societal level, cooperation between insurance companies and brokers, and between the private and public sectors, is established and strengthened. The cooperation is supported through advisory services and workshops and especially through the provision of data and the preparation and dissemination of climate risk information.

The project takes into account that women are more severely affected than men by the negative effects of climate change and are disadvantaged in agricultural and financial systems.


Additional information