Swiss Re, a global reinsure with a focus on risk transfer and asset management, is set to provide five years worth of reinsurance to a new microinsurance project in Ethiopia. The project was developed by the United Nations World Food Program, a branch of the U.N. that confronts worldwide hunger issues, and Oxfam America, an organization concerned with climate change adaptation, food security and aid reform.
This project aims to provide Ethiopian farmers with drought insurance for their crops. Swiss Re will be funneling more than $1 million toward the project.
The reinsurer’s support of the project stems from rising interest in the emerging microinsurance industry. Microinsurance provides coverage to low-income individuals and groups, protecting them from risks often associated to their environment. This type of insurance has been successful all over the world in the life, property and credit sectors, but agriculture has been tapped as a key area for growth within the industry.
Several African insurance companies will participate in the project, offering varying forms of agriculture insurance.
Ethiopia is currently facing a very real food crises spawned from a relentless drought. The United Nations have petitions the world’s community on behalf of Ethiopia for financial and food aid.
Oxfam America has been courting insurance companies in the U.S. to enter into the project in the hopes that insurance can be extended to cover livestock as well as crops.
The project is scheduled to begin in November. Both the WFP and Oxfam are seeking $28 million to launch the project.