Insurance

Royal Exchange, Agritask set to underwrite 1m small holder farmers by 2025

The Group Managing Director, Royal Exchange Plc, Olawale Banmore

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Chuks Udo Okonta

Agritask, a leading global developer of a holistic agronomic operations platform, in collaboration with Royal Exchange, General Insurance company limited, Nigeria’s premier insurance group in Nigeria, announced yesterday the launch of a unique joint initiative digitizing crop and livestock insurance with a social KPI to underwrite 1 million small holder farmers by 2025.

The initiative involves a variety of stakeholders in the agricultural sector and beyond, including banks, cooperatives, ag-consultants, input distributors, ag-buyers etc.

Currently, agricultural insurance penetration levels remain very modest in developing countries. In particular, uninsured smallholder farmers can be severely impacted by variable forces of nature, with little financial means to manage such risks. This protection gap may potentially amplify poverty, hunger, enhance various forms of inequalities within societies and ultimately introduce a burden on the economy and challenge the stability of the country. Sustainable risk mitigation mechanisms and advanced technologies are required to tackle the preceding obstacles.

Towards the accomplishment of such an objective, Royal Exchange and Agritask embarked on a project to create a solid foundation for digital crop-insurance framework in Nigeria by utilizing Agritask’s well-structured and accurate data infrastructure facility. The infrastructure is capable of combining diverse sources of data on one platform in an unprecedented resolution, including the mapping of farmers, their field locations, crop types, weather, soil and topography, among others. This foundations allow for accurate risk modeling and the design and pricing of suitable insurance policies.

Importantly, the data infrastructure, once in place, can be utilized by a number pf stakeholders. After seeing the initial results, those in the Nigerian agricultural ecosystem such as banks, cooperatives and input distributors expressed an interest to participate in the project. Building on one database, each stakeholder can have customized tools tailoring to their positioning in the ecosystem. This creates new business opportunities as well as greater empowerment of smallholders, who will benefit from better reach and higher-quality products.

“Farming in most of the world is comprised of small-scale farmers who face the very same risks and challenges large commercial operations do: Bad weather, low yields, and supply chain challenges. However, they do not have the resilience that larger commercial operations have; that’s why there is a huge need for greater risk management abilities in this segment,” said Ofir Ardon, Agritask CEO. “Because we work with the entire ecosystem, we can provide economies of scale for growers, both at the individual farmer level, as well as for all other players in the ecosystem.”

“There are many regional impact projects in Nigeria, but most of them struggle to reach hundreds or thousands of farmers, simply because they do not have the technology required to manage and optimize an operation of this scale. Therefore, many times, when the project funding ends, the impact vanishes,” said Chukwuma Kalu, Head of Agribusiness & Business Development, Royal Exchange General Insurance Company Ltd. “Working with Agritask, we have a great opportunity to develop a more sustainable model. We believe this kind of sustainability can, and should, become a reality across Africa. With Agritask’s technology, we can level the playing field and get them to operate with the same resilience as larger commercial entities.”

About Agritask

Agritask is a holistic ag-operations platform, designed to enable fact-based decision making for agricultural businesses. To fulfill this vision, Agritask integrates a wide-array of agronomic technologies, tools and data sources into one single platform that analyzes the data and produces alerts, recommendations, and actionable insights. Data sources vary from sensors and machinery, aerial images, forecast data, and more. Agritask’s platform is extensive and rich in its capabilities, yet built in a modular, flexible way that allows it to grow with customer needs, while facilitating a more advanced use of ag-technologies, making them accessible via one single platform. Agritask is being successfully licensed in more than 20 countries, with a broad spectrum of clients ranging from large growers, multi-farm corporations, private equity managers, ag-buyers, food conglomerates, ag-financing and insurance companies, to governments and NGOs.

Agritask is headquartered in Israel and has various satellite offices around the globe. The company employs dozen of engineers, agronomists, developers and other agriculture and farming experts. It is backed by strategic investors.

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