Farmers are increasingly turning to agricultural insurance to protect their investments against floods, drought, diseases and other production risks.
The Managing Director of Guinea Insurance Plc, Mr Ademola Abidogun, said the company had insured about 50 farmer groups, including agritech firms, within six months.
Abidogun disclosed this in an interview with reporters on Tuesday in Lagos. Also present was Mr Baron Omiji, Team Lead, Agric Insurance at Guinea Insurance Plc.
He said the company’s Agricultural Insurance Desk became fully operational in 2023 and has since expanded coverage across various segments of the agricultural value chain.
According to him, beneficiaries include poultry, crop, fishery and livestock farmers, as well as owners of farm properties.
Abidogun said both smallholder and commercial farmers have benefited from the company’s agricultural insurance products, with smallholders standing to gain more.
He explained that smallholder farmers are more vulnerable to production risks and often have limited access to finance to recover from losses.
“Both sets of farmers benefit from our products. However, smallholder farmers benefit more because they are more exposed to risks and have limited access to finance,” he said.
Abidogun said the company has intensified awareness campaigns through partnerships with agritech firms to improve agricultural insurance adoption, particularly in rural communities.
He cited a recent farmers’ engagement in Iseyin, Oyo State, where Guinea Insurance educated farmers on protecting their investments against unforeseen losses. According to him, several farmers who attended the programme subsequently took up insurance cover for their farming operations.
The managing director said the company’s agricultural insurance products protect farmers against climate-related and other production risks, including flood, drought, windstorm, fire and heat stress.
He said the company also offers specialised insurance products covering crops, livestock, fisheries, poultry, farm produce and agricultural assets.
Abidogun explained that the Crop Insurance Policy compensates farmers for losses arising from fire, flood, pests, diseases, drought, windstorm and aircraft damage.
He said livestock insurance covers mortality resulting from fire, flood, diseases, accidents and windstorms, while fishery insurance covers losses caused by similar risks and pond collapse.
He added that poultry farmers are protected against losses resulting from fire, flood, diseases, accidents and windstorm damage.
According to him, the Combined Produce and Investment Insurance Plan protects farm buildings, equipment and harvested produce against fire, flood, theft, burglary and machinery damage.
He said the plan also covers produce kept in warehouses or transported to markets, helping farmers reduce losses beyond the point of harvest.
Abidogun said Guinea Insurance also operates an Area Yield Index Insurance Policy for crop farmers whose yields fall below agreed expectations.
He said the policy covers adverse events such as drought, flood, heatwaves and windstorms, with compensation determined by several farm and production factors.
These factors, he said, include hectares cultivated, historical production records, production costs, farm-gate prices, expected harvest and farmers’ experience.
The managing director dismissed the notion that agricultural insurance is only for commercial farmers or that insurance companies fail to honour genuine claims.
He said both smallholder and large-scale farmers have benefited from claims settlements under the company’s agricultural insurance policies.
“One of the biggest misconceptions is that agricultural insurance is only for large-scale farmers and that insurance does not pay.
“We have insured both small and large-scale farmers, and they have benefited through claims payments whenever genuine losses occurred.
“Agricultural insurance helps to de-risk farmers’ investments and provides compensation when unforeseen losses occur,” he said.
Abidogun said the company’s agricultural insurance premiums are flexible and affordable because they are designed to suit different categories and scales of farming operations.
He explained that premium rates vary according to the type of agricultural enterprise, farm location, cultivated hectares, number of livestock and scale of production.
He added that genuine claims are processed promptly after field assessments have been completed.
“For agricultural insurance, every reported loss is assessed on the farm, and genuine claims are paid within one week after the execution of the discharge voucher,” he said.
Abidogun described insurance as an essential risk management tool that farmers should adopt from the planning stage of their farming activities.
According to him, purchasing insurance before losses occur enables farmers to recover more quickly from disasters and sustain their businesses.
“Insurance is what you buy when you don’t need it, but when you need it, it might not be readily available.
“It is a necessary and reliable risk management tool that every wise farmer should consider from the planning stage of farming operations,” he said.
He said such early preparation would help farmers guard against unforeseen circumstances capable of eroding their investments.
