Tinaye Agere
Online Reporter
THE high risk of hailstorms, flash floods and other weather-related hazards during the on-going rainy season has prompted more farmers to take tobacco insurance cover, a leading risk management and insurance expert has said.
Thomas Guwu, the managing director of Quantum Multiple Agents, a company that offers tobacco insurance cover, said there has been a notable increase in the number of small-scale farmers who took insurance cover this season.
“Talking from personal experience, I noticed that the number of tobacco farmers that approached us and took insurance cover almost doubled.”
“Last year, we had 6 700 farmers in our books and this season, the number shot to 8 200,” Guwu said.
Guwu attributed the increase in insurance cover uptake to a number of factors.
“We are getting into the season on the backdrop of projected normal to above normal rains which are, however, prone to weather-related hazards,” he said.
“More and more farmers then insured their crop as a way of safeguarding their crop.”
He attributed the increase in insurance cover uptake to an increase in the number of hectares under tobacco.
“Again, speaking from personal experience, we insured 10 000 hectares of tobacco last season. We have 13 500 hectares under cover this time around,” he said.
According to Guwu, one of the factors that drove more farmers to insure their crop was the prompt payment of compensation and claims payouts.
“Those farmers whose crops were affected by weather hazards and sought compensation had their claims paid promptly in hard currency.”
“In our case, we also embarked on an awareness campaign for farmers to understand the need to insure their crops,” he said.
He said as an incentive, his company reduced the seasonal insurance premiums by 30 percent but still maintained the same cover.
Guwu, however, warned farmers against double insuring their crops.
“Last season we had cases in which some farmers double insured their crops. Farmers must desist from engaging in such practices as they will end up losing pay-outs.”
Online Reporter