Online Reporter
Nelson Gahadza
IN many developing agricultural economies, insurance is increasingly recognised as a vital tool for protecting farmers from the impacts of climate variability.
However, awareness on how agricultural insurance works remains low, especially among smallholder farmers, who are the most vulnerable to weather shocks.
In Zimbabwe, the agricultural index insurance pilot project launched in Goromonzi in 2023 set the foundation for a broader introduction of an innovative index-based insurance product tailored for the needs of smallholder farmers.
The project was a collaborative effort between the Government, the Insurance Council of Zimbabwe, the Insurance and Pensions Commission (IPEC), the International Finance Corporation, AFC Insurance and other partners.
The index insurance’s objective is to protect Zimbabwe’s smallholder farmers from climate-related risks and build resilience among them, ensuring food security and contributing to Zimbabwe’s overall economic stability.
An insurance industry expert who requested anonymity said the gap between expectation and understanding was widening, indicating that, while insurance was designed to offer a safety net against risk, many farmers perceived it as an investment scheme that should produce annual returns.
“This misconception has led to fluctuating uptake, mistrust and reduced willingness to subscribe,” said the expert. “As climate change intensifies and weather patterns become increasingly unpredictable, the need for robust insurance awareness and clear communication on premiums, payouts and risk coverage has become more pressing than ever.”
He added that farmer education remained a critical gap, as most farmers saw the premiums as an investment.
“But when farmers paid the premiums again the following season, and received no payout due to good rains, many became frustrated, highlighting a key misunderstanding: Insurance only pays out against adverse weather conditions that impact crops and harvests,” the expert said.
“This challenge has become visible in Goromonzi, where uptake has declined as farmers become sceptical, especially after subscription fees were increased to US$25.”
A smallholder farmer in the district, Mrs Gladys Mutisi, said after receiving a payout, she managed to buy groceries and other items, but she no longer saw value in subscribing because she did not receive any payout the following season.
The Insurance Council of Zimbabwe earlier this year said the agricultural insurance programme was targeting 50 000 smallholder farmers for the 2025/2026 season, a significant increase from the 20 400 registered, building on the success of the pilot project launched in Goromonzi in 2023.
It said in addition to Mashonaland East, the insurance programme had been extended to Matabeleland North (Umguza), Matabeleland South (Bulilima), Mashonaland West (Hurungwe), Mashonaland Central (Bindura), Manicaland (Buhera), Midlands (Gokwe South) and Masvingo (Chiredzi).
Economist Mr Walter Mapfumo emphasised the need for insurers to strengthen communication.
“Insurance players need to scale up awareness on how insurance works, and their field officers should give more information on agriculture insurance when they engage farmers,” he said.
He pointed out that many farmers still perceive insurance as an investment rather than a cover for risk. He said service providers need to improve farmer engagement and attract more subscriptions.
IPEC director of insurance and microinsurance Mrs Sibongile Siwela acknowledged the awareness gap.
“People can check the weather and decide on taking up agricultural insurance; if there are rains, they may decide there is no need for insurance,” she said in an interview during a recently held Southern Africa Reinsurance indaba in Victoria Falls, Zimbabwe.
Despite this challenge, Mrs Siwela noted progress, saying the scheme started with 4 000 farmers in Goromonzi, and it was a drought year.
“The following year they scaled up to eight districts, and the number grew to 20 000, and they want to scale it up to 12 districts,” she said.
She said IPEC had already developed the agriculture index insurance regulations, which were awaiting approval.
Ms Karimu Nthiga, regional coordinator for Microinsurance Network, in an interview on the sidelines of the indaba, said microinsurance providers across emerging markets, including Zimbabwe, were sharpening their focus on product customisation, distribution partnerships and climate-related risks, as they raced to tap into underserved customer bases.
She estimated that 70 percent of potential customers remained unreached, but unlocking that market requires granular segmentation and co-creation with communities.
“Rural farmers need products such as crop insurance, while young urban residents are more likely to prioritise health cover,” she said, adding that insurers must design solutions that “fit clients’ way of life” rather than developing products in isolation.
In Zimbabwe, the microinsurance industry serves low-income individuals and informal sectors by offering affordable products like health, life and agriculture insurance, with a regulatory framework to support its growth.
Driven by mobile technology and community-based models, the sector uses fintech to reach previously excluded communities and has recently seen regulatory updates, including a new capital requirement of US$100 000 for microinsurance businesses.
Zimbabwe Farmers Union director Mr Paul Zakariya earlier in the year said more innovation was needed within the insurance sector itself, stressing that insurance was a good and useful tool to protect any business from the adverse effects of nature, disaster and errors, among other things.
To improve uptake, he urged insurers to invest in practical demonstrations and awareness, saying such visibility could create trust and attract more farmers to subscribe.
