Radiant Insurance on why there is low uptake of agriculture insurance in Rwanda

Millions of farmers and livestock keepers in Rwanda are facing the devastating impact of disasters without the safety net of crop and livestock insurance. Ovia Tuhairwe, the Deputy Managing Director at Radiant Insurance, sheds light on the reasons behind the low uptake of agriculture insurance in the country. Despite the availability of insurance products since 2012, the penetration of agriculture insurance remains alarmingly low. Figures from the Strategic Plan for Agriculture indicate that less than half a percent of farmers are covered by agricultural insurance. This issue stems from a lack of education among farmers and a perception that insurance is only for the wealthy. To address this challenge, efforts are being made to educate farmers about the importance and affordability of insurance products for agriculture. Capacity-building initiatives are also being implemented to enhance the skills of staff involved in sales, marketing, and claims management. By establishing trust through efficient and timely claims compensation, the aim is to shift the mindset of farmers and encourage them to invest in insurance. The affordability of premiums is another key factor that needs to be highlighted. The premiums for livestock and crop insurance offered through the National Agriculture Insurance Scheme are designed to be accessible to farmers. Livestock premiums range from 4.5% to 6%, while crop premiums vary between 7.8% and 8.5% per hectare, depending on the commodity. Despite the impacts of climate change on the agriculture sector, affordable insurance options are available to mitigate the financial losses incurred due to natural disasters. The sector is indeed facing significant losses, reflected in the premium claim ratio. However, the Deputy Managing Director emphasizes the importance of resilience and the need for widespread insurance coverage within the sector. Agriculture plays a crucial role in Rwanda's economy, with 70% of the population engaged in agricultural activities. To safeguard the livelihoods of farmers and uphold the stability of the sector, it is essential to encourage comprehensive insurance coverage. Looking ahead, achieving 100% insurance coverage in the agriculture sector requires a multifaceted approach. Investment in capacity building for staff and stakeholders, alongside a concerted effort to change the perception of insurance as a valuable investment rather than a costly expense, is crucial. By fostering a culture of trust and demonstrating the value of insurance through prompt claims settlements, the industry can work towards increasing the uptake of agriculture insurance. The collaboration between government interventions and private players will be instrumental in driving this change and ensuring a resilient and sustainable agricultural sector in Rwanda.