Pensions and Insurance Authority calls on farmers to adopt insurance in risk management

Pensions and Insurance Authority (PIA) says insurance is key in promoting growth, building financial resilience and sustaining businesses.

It was, therefore, important for farmers and Small and Medium Enterprises (SMEs) to take up insurance to enable them manage various risks such as climate change, fire and theft.

Authority Communications Manager, Doreen Kambanganji-Silungwe, said this in Lusaka on Monday to mark Farmers Day.

Kambanganji-Silungwe said insurance should not be limited to commercial businesses as risks cut across sectors.

She said, for example, most commercial farmers were insured but the majority who are small-scale farmers do not have insurance and therefore, remained exposed to financial losses that may arise.

“Small-scale farmers are vulnerable to weather-related shocks such as drought and flooding, Insurance can therefore be a viable risk management tool for small-scale farmers and this is why the Authority and other stakeholders including government are promoting inclusive insurance tailored towards small-scale farmers.

“This is because insurance provides an efficient solution for farmers to protect their crops and animals against losses and encourages investment in the agriculture sector,” Kambanganji-Silungwe said.

She said agriculture insurance seeks to increase the resilience of farmers and producers against agricultural production and market risks, especially those resulting from the impact of climate change and other infrastructure risks.

Kambanganji-Silungwe added that insurance enhances the capacity of farmers to access financing, as this was a requirement by most institutions that support farmers with finances.

She said it was important for SMEs to consider taking up insurance to protect themselves against risks such as fire, theft and flooding.

Kambanganji-Silungwe said this would help them cope with any potential risks that they may encounter in business, as the insurance payout would help them continue with business with minimal interruptions.

“We currently have eight insurance companies that have microinsurance products and we hope that more companies will start offering inclusive insurance productsespecially with the introduction of microinsurance in the new Insurance.”

“The Authority will soon start issuing licenses to microinsurance companies. These companies will focus on providing insurance products targeting the low-income earners and this should help increase uptake of insurance in the informal,” she said.

Speaking at the 95th Zambia Agricultural and Commercial Show, Kambanganji-Silungwe said the Authority recognised the importance of creating an economy that fosters equitable growth and prosperity for all citizens.

“The Authority takes its role in creating an enabling environment that ensures that all segments of society actively participate and benefit from both pensions and insurance products. One of the key strategic pillars in the Authority’s current strategic plan is financial inclusion, which is focusing on promoting the development of inclusive pensions and insurance products,” she said.

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