ILO, World Bank to enhance access to index insurance in rural areas
The International Labour Office (ILO) and the World Bank Group (WBG) have signed a memorandum of understanding that aims to provide access to improved insurance products to hundreds of thousands of smallholder farmers, small businesses and individuals in Asia and Africa. The three year partnership is the first-of-its-kind within the rapidly evolving index insurance industry.
The Facility and GIIF combine their strengths to improve the delivery of index insurance to farmers and their families as well as businesses, through extraction, dissemination and promotion of lessons coming from grantees supported by the GIIF and to strengthen microinsurance markets in countries where GIIF operates.
“The ILO’s Facility is a knowledge hub for inclusive insurance, and we are excited to leverage our expertise in research and capacity building to improve index insurance in collaboration with GIIF. With the improved availability of quality insurance, low-income people will increase their resilience to risk, enabling them to adopt improved production processes to help break the poverty cycle of low investment and low returns,“ said Craig Churchill, Team Leader of the Facility.
As part of the partnership, the Facility will bring the GIIF partners into a Community of Practice that will provide a venue for knowledge sharing and experience exchange. Publications and interactive events will be used to capture and share the latest knowledge of good practices and successful strategies in making index insurance work. To ensure that insurance is valuable for beneficiaries, a series of capacity building interventions and consumer awareness events are also lined up in five countries in Africa and Asia.
“GIIF is pleased to further extend its commitment to the use of index insurance as a prudent and necessary risk management tool for agriculture, food security and disaster risk reduction. However, regions where index insurance is particularly relevant in serving as a hedge against climate-related risks – including Sub-Saharan Africa, the Caribbean and Asia Pacific – are in need of accurate data and innovative frameworks to sufficiently address local market conditions,“ said Gilles Galludec, GIIF program manager. “The partnership with the Facility will enable GIIF’s grantees and partners from the private sector to share their knowledge and develop best practices within index insurance. We are confident of identifying innovative index insurance solutions that are practical, effective and financially viable for smallholder farmers, businesses and individuals, and that will make a lasting impact,“ he concluded.
This partnership with the Facility is an important complement to the recent funding support from the Dutch Ministry of Finance to GIIF and is in line with the Facility’s five-year programme of “building quality microinsurance at scale” to accelerate the adoption of good practices by key stakeholders to dramatically expand access to better insurance services.