Africa Re confirms its position as leader and pioneer in the
area of reinsurance in Africa by supporting an agricultural
insurance project in Senegal
As part of a project initiated and managed by the West
African Development Bank (BOAD), the National Agriculture
Insurance Company of Senegal – Compagnie Nationale
d’Assurance Agricole du Sénégal (CNAAS) – has chosen
Africa Re, the most prominent African Reinsurer, to lead the
reinsurance programme of 40,000 cotton and maize farmers in
Senegal, jointly with AXA CS and CICA Re.
Agriculture, a key sector of the African economy, employs
60 per cent of the working population and accounts for 35% of the
GDP. This sector is exposed to several climate-related risks
such as drought or floods, which undermine food production
and jeopardize food security. Until recently, projects to
insure farmers against such risks in Africa were mainly
micro insurance pilot projects limited to regions or
villages and did not enable a real development of
agriculture insurance.
With the technical assistance of FINACTU consultancy firm
(http://www.finactu.com), BOAD and CNAAS initiated an
innovative national index-based insurance project in Senegal
to promote agriculture insurance in the WAEMU zone. This
project is certainly innovative in Africa inasmuch as it
targets all the farmers of a sector and makes positive use
of the institutions of the sector. Indeed, the project
targets about 40,000 farmers of the cotton sector, which is
very well structured in Senegal; 5,000 of them are also
maize farmers.
In order to effectively conduct the project, the BOAD and
CNAAS decided to join forces with a lead reinsurer of
international standing to assist in designing and pricing
insurance products of the project, support CNAAS in building
technical capacity in agriculture insurance and insure most
of the risks of the products designed. These institutions
chose Africa Re and its partners (AXA CS and CICA Re) whose
competence and experience match the requirements of this
significant project, which will serve as an example and will
pave the way for other African countries as regards
insurance of their farm products.
Hitherto, only non-African reinsurers reinsured agriculture
risks in Africa. At present, Africa Re has asserted its
leadership jointly with its partners, thereby taking a clear
stance as leader and pioneer of African reinsurance by
reinsuring agriculture and climate-related risks, which
constitute a growing challenge to African countries.
