By Business a.m.
The National Insurance Commission (NAICOM) has given its nod to no fewer than 16 insurers to underwrite agricultural insurance across the country.
They will add to the capacity now being offered by the state-owned Nigeria Agriculture Insurance Company (NAIC), according to a monitored report.
It followed disclosure by Ken Aghoghovbia, deputy managing director and chief operating officer of African Reinsurance Corporation at the recent Africa Reinsurance Corporation workshop on agricultural insurance by Prospects for agricultural insurance
Aghoghovbia pointed out that agriculture remains a key contributor to Nigeria’s GDP, accounting for 30 percent of the country’s total economic output and employing at least 35 percent of its over 200 million population.
With sustained pressure on food security, arising from the burgeoning population and the government’s push to diversify the economy, he said that agriculture will continue to be a key area of focus for many years to come.
“Owing to the richness of farming in Nigeria, it is projected that the market has a potential to generate at least $600 million worth of agricultural insurance premiums in a year, against the $10 million reported in 2021,” Aghoghovbia said.
He added, “Over the last five years, the market saw exponential growth in insurance premiums from agriculture, but this growth has been overshadowed by the unfavourable loss experience.”
The International Finance Corporation (IFC), has earmarked $970,000 for the development of agricultural insurance that will transform agribusiness in Nigeria. The project builds on lessons learnt from past IFC projects and information gathered from a wide range of insurance stakeholders in Nigeria to define interventions that would ramp up the outreach of inclusive insurance.