I got back from my first client visit to Africa at the 5th Swiss Re Agriculture Insurance Roundtable in Nairobi. While there, I caught up with our clients and also with government officials, NGOs, development aid agencies, multilateral donors and interestingly with farmers (demand side).
Agriculture is the main pillar of the economy in nearly all countries in sub-Saharan Africa - and the main source of employment in all of them. Despite - or because of - this, it faces some tough challenges.
The first is population growth. By 2050 the population in Africa will double to 2.4 billion people. A large share will be living in cities and will depend on a vibrant agricultural sector in the countryside for their food. But this very sector is under threat from climate change.
That was evident from the many discussions we had on the impact of the latest El Niño. Droughts had affected many regions. What's more, lower yields in some countries have led to economic losses as well as food imports. It's very clear to me that many countries are currently struggling when it comes to food security.
So what's our role if we want to change that? In many developed countries, farmers can keep on farming because they have insurance in place if drought, hail, flood or pests affect a harvest. In Africa that is not the case: insurance penetration of agriculture outside S. Africa is one percent on average. With insurance, countries can become more resilient – not only in terms of food security but also in terms of economic health. At the moment, however, any food crisis is a huge shock to the already fragile economies of sub-Saharan Africa.
Designing state-of-the art insurance products like parametric covers is one way we can strengthen food security. But it's not enough. To really make an impact, we need to understand the full ecosystem in which the farmers, especially low-income farmers, operate, and partner with stakeholders like governments, NGOs, seed and fertilizer providers, banks and aggregators so they get the services they need. Only then, will we successfully build a sustainable agricultural sector.
We can accelerate this process if we also use the technologies of today. Africa has the potential to apply technology in certain areas. We discussed Apps on underwriting and claims management. Combining these with the mobile payment solutions that exist on the continent is one way to bring services and information to remote areas where they don't normally exist
Discussing these technological game changers with our clients was a highlight for me for two reasons. First I got a clear sense that Africa is open to them. In fact it made me think about the agriculture hackathon we did in Zürich, when we looked at apps for Africa. Some of the apps created focused on helping farmers in Africa prepare for the problems they face – like an early warning app for drought. Second I sensed the willingness and potential to address the challenges to come for agriculture in Africa.
We will work hard - with all stakeholders - to be part of this process: to grow our business and to make the world in Africa more
Read more about meeting the agricultural challenge in Africa.
Category: Food security: Farming, Livestock, Climate/natural disasters: Climate change, Drought, Resilience