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23 Jan 14 16:08

2013 saw hail hit several European countries. And the year before, there were severe droughts in the US, Russia and Argentina. Even though these events triggered huge harvest losses for farmers at the time, they have since bounced back and the normal agricultural routine has been resumed.

The situation in parts of North Africa could not be more different. There, the 2011 and 2012 droughts have had a devastating and longer-lasting impact. People were obliged to walk for miles to UN aid stations to get food, water and medical attention. The drought literally drove them from their land, in many cases maybe even for good. This was a migration that swelled the number of people living in urban areas where poverty is already a major problem.

These totally contrasting outcomes of what were similar meteorological events were as unacceptable to me in my previous function as head of Swiss Re's Global Partnerships unit as they are today as our company's Group CEO.

For 80% of farmers worldwide, the recurrence of drought, hail, flood or other natural perils will spell disaster. These are the farmers who live in developing countries. So if we want to ensure they are able to continue farming, we need to spread the word about the benefits of insurance.

That said, insurance alone will not be enough. We need the other stakeholders in the agricultural value chain, too.

I refer to governments for the provision of infrastructure, NGOs for knowledge transfer and official development assistance (ODA) programmes for technical assistance. We also need close collaboration between seed and fertilizer companies as well as between the banking and insurance industries. Over time, these alliances will help us develop self-sustaining agriculture.

One initiative that brings all these stakeholders together is the World Economic Forum's (WEF) "New Vision for Agriculture." (

I'm impressed by this initiative not only because it brings all partners to the table but also because it has formulated clear goals. My company, for example, has set itself the goal of bringing insurance to up to 1.4 million smallholder farmers in sub-Saharan Africa by 2017.

Another piece of the puzzle will be to take a more proactive approach towards disaster preparedness in high risk communities. Here again, collaboration between diverse stakeholders can support the resilience of local communities, agriculture, and economies of those nations affected by natural disasters. As Filipino senator Bam Aquino shared at WEF this morning, "Nothing could prepare us for Haiyan. We need microinsurance to help people get back on their feet."

To this end, Swiss Re is partnering with the International Committee of the Red Cross (ICRC) to call for the development of integrated risk management practices that can offer countries at risk with practical and functional means to not only recover from disaster, but to invest for long-term growth and development as well.

ICRC president Peter Maurer and I share our thoughts on this initiative in the included video.

Ultimately, my hope for both these initiatives is that they will move us closer to this goal: I want what is normal for farmers in the developed world to be just as be normal for farmers in developing countries. Their livelihoods should be protected by insurance so they can continue farming even if disaster strikes. Making this a reality for 80% of smallholder farmers worldwide is a massive challenge, but one which will also deliver great rewards.

Such initiatives both reduce human tragedy and help replace emergency aid with real self-sustaining development. If existential risks are covered, people can also invest in new businesses. This will generate fresh employment opportunities in areas where currently there are still job shortages. So by making agriculture resilient against natural perils, we are contributing to new opportunities in many parts of the world.

Category: Food security: Farming, Climate/natural disasters: Resilience


Alicia Montoya - 25 Jan 2014, 7:58 a.m.

Thank you for posting this and for engaging in such a key issue. I cannot imagine a more pressing need than securing sufficient, safe nutrition (and water!) for all.

But it is, as you stress, a highly complex issue. This beautiful video on food security highlights the interconnected risks that are at play:

As a consumer, I often feel that many expect governments to solve every issue, or for companies to go against their mandate. The fact is, we have to take active steps to achieve sustainability together, and consumers have a huge part to play. We need to elect leaders that are willing to invest in the future, and buy from (and invest in) companies that care about the future. And I'm not kidding myself: I don't expect companies to do so in my interest, but because it makes business sense. If it doesn't yet, that means we need to change the incentive structures so that it does.

As you say, this challenge requires all of us, including consumers.

Brandon Mathews - 29 Jan 2014, 1:45 p.m.

Climate change introduces new volatility which can affect frequency. A projected population of 9 billion people will have to absorb the rising cost of natural catastrophe and weather related events, which will make any shortfalls in funding that much more of a human tragedy. Farming successes may sometimes create monocultures – and I’m insufficiently informed whether this increases frequency or severity more. In the dry terminology of our industry, food security faces higher potential frequency and greater severity of loss events.

Implicit in Mr. Liés’ timely call for collaboration between stakeholders is a call for innovation. Efficiencies won through comparative advantage will achieve new results for society -- as for business -- when these recombine in new creative ways. Innovation isn’t so much an idea or ideal… it’s the pragmatic work to find new ways in new spaces and as such partnerships are an excellent approach.

The Kilimo Salama effort developed by Swiss Re and Syngenta Foundation (apologies for not mentioning any others involved) is a deservedly well-referenced example. When at AIG in the late 1990’s, we joined with Whirlpool and Unibanco to bring new products and services to market in Brazil with results that no single actor alone could have achieved. Recently, new facilities, incubators, and other initiatives have emerged that support such vital innovation – especially important where profit objectives are coupled with a longer view on the role of one’s business in the society where it operates.

Swiss Re’s commitment to reach 1.4m small-holder farmers in Africa by 2017 is laudable. As the saying goes, “what gets measured gets done.” In the effort to reach that specific goal, Swiss Re will certainly continue to innovate and create new partnerships and this too will have a broader effect. Being transparent with such goals (and maybe even transparently failing every once in a while) are great contributions as well.

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