By Henry Uche
A coalition of microinsurance advocates in Africa has called on insurers and governments across the region to prioritize coverage in agriculture and health, viewing it as a fundamental pillar for driving sustainable socio-economic development. The push for enhanced microinsurance support draws on key insights from the 2023 Landscape of Microinsurance report by the Micro Insurance Network.
The report x-rays the vital role that agriculture microinsurance plays in advancing several Sustainable Development Goals (SDGs), particularly SDGs 1 (No Poverty), 2 (Zero Hunger), and 13 (Climate Action).
With approximately 2.6 billion people globally depending on agriculture for their livelihoods, predominantly in developing nations, agriculture microinsurance emerges as a crucial tool for poverty alleviation. By offering a safety net for farmers and producers, this form of insurance shields their livelihoods from the unpredictable risks associated with agriculture, ensuring financial stability and security.
The group emphasised that agriculture microinsurance contributes significantly to global food security by enabling farmers to build resilience against various risks. It also facilitates access to credit, empowering farmers to increase and sustain food production. This, in turn, is essential for combating hunger and ensuring that communities have consistent access to nutritious food.
Given the direct impact of climate change on agricultural production and food security, the group highlights the need for agricultural microinsurance solutions to provide vital protection against climate-induced risks. By safeguarding farmers against the adverse effects of climate change, such as natural disasters and erratic weather patterns, microinsurance helps to secure livelihoods and enhance resilience within the agricultural sector.
The group further advocated for African underwriters to develop more comprehensive agricultural microinsurance products. These products should address climate-related risks, cover a range of perils like livestock mortality and property damage, and potentially bundle additional coverages such as income protection and medical expenses. This approach would not only compensate farmers for lost production but also support broader food security and community resilience.
Similarly, health microinsurance is identified as a critical area that warrants increased focus to achieve SDGs, particularly SDGs 1 (No Poverty), 3 (Good Health and Well-being), and 5 (Gender Equality).
Health shocks can devastate household finances, both through direct healthcare costs and lost income due to illness. The group notes that health microinsurance can play a pivotal role in preventing families from falling into poverty by mitigating the financial burdens associated with health crises.
Where national health schemes are limited or unavailable, health microinsurance becomes essential in facilitating access to healthcare.
Even in regions with national health coverage, microinsurance can complement these services by covering additional healthcare needs and managing the financial impacts of health events, such as income loss during illness.
The group underscored the particular importance of health microinsurance for women, who often face unique health challenges and disparities in access to quality healthcare, including maternal health services. For example, microinsurance that covers medical expenses for diseases like breast cancer can significantly improve health outcomes for women by ensuring they receive necessary treatment and care.
The COVID-19 pandemic has led to a notable expansion in health microinsurance portfolios for some insurers. Interviews with experts suggest that insurers who demonstrated value to customers during the pandemic—by ensuring coverage for COVID-19 and offering digital alternatives to in-person services—have managed to maintain momentum and even grow their health microinsurance offerings post-pandemic.
The group also points out the increasing recognition of climate change as a major public health threat, with insurers and stakeholders beginning to address the interconnected risks of climate and health. Emerging microinsurance products are now targeting climate-exacerbated health risks, such as increased malaria transmission, and offering bundled coverage that combines health insurance with agriculture or property insurance against climate-related disasters.
Additionally, the coalition calls for concerted efforts from insurers, governments, and other stakeholders to develop and promote microinsurance products that address the critical needs of the agriculture and health sectors, thereby contributing to the achievement of national development goals and ensuring a more resilient future for all.