The importance of the agricultural insurance market cannot be overstated, according to the outgoing president of the African Insurance Organisation (AIO).

Addressing the 49th General Assembly in Algiers, Dr Ben Kajwang told the 1,800 delegates that Africa has a real opportunity to supply the rest of the world as well as itself with food. He stressed the benefits of having 65% of the world’s uncultivated land across the continent, as well as abundant rain, 300 days of sunshine and fertile soils.

Africa has the opportunity to deliver two or three times the amount of cereal that it does currently,” he claimed, before stressing the social importance of agriculture to Africa, employing so many people across the continent.

Alongside that, he said, there is a real opportunity for the African insurance market to evolve. Dr Kajwang said that, at the moment, the market is riddled with low penetration levels and a limited range of products. Thinking outside the box, he suggested, would enable the market to take advantage of the many opportunities – and to enable them too.

However, he cited three major challenges for the market that lie ahead.

The first of these is climate shock. One in 200-year events are becoming more frequent and certain countries across the continent are struggling as one event hits them after another. It makes it almost impossible, he explained, for these countries to recover before they are once again challenged.

The second of the challenges has been the global price shock. In the wake of the Covid-19 pandemic, Dr Kajwang said there have been massive increases in energy as well as fertiliser costs, alongside trade disruptions, which have made it difficult for families across Africa who were already struggling to put food on the table.

The final of the three challenges is under-nourishment. In Africa, he said, some 21% of the population were considered  under-nourished a few years ago but today that figure has reach 25%. The implications of that were huge, with grave consequences for the health and welfare of African populations, said Dr Kajwang,

“Our industry has an important role to play, with insurance playing a key role in making agriculture across the continent viable. Insurance can ensure food security and provide a safety net for farmers to avert disaster,” concluded Dr Kajwang.

Liz Booth