Local insurer Global World Insurance Co (GWI) is expanding its crop insurance pilot project with the signing of an agreement with a private contract farming business, U Soe Win Thant , the director of Global World Insurance, revealed.
In 2016, Global World Insurance submitted a proposal on offering crop insurance to the Insurance Business Regulatory Board IBRB under the Ministry of Planning and Finance.
Last January, the ministry approved a two-year pilot project for GWI’s crop insurance. The company’s crop insurance is yield-based and the premium is two percent of the market price of rice from one acre (0.4 hectares) of farmland. Should crops be damaged due to bad weather, the insurer will calculate compensation payouts based on the market price per acre of rice harvested in different regions.
The company’s pilot project is the first time crop insurance has been offered in the country and covers on rice growers for now. The insurance is being offered in Ayeyarwady, Mandalay, and Yangon regions.
“Since this is just the first year of the pilot project, we are learning that there is a need for things such as a national crop insurance committee, crop insurance laws, and crop re-insurance,” U Soe Win Thant said.
“Senior government officials are keen on implementing crop insurance, but at the lower levels we are facing a lack of support from government departments. We have faced difficulty getting exact data on yields and weather patterns from the relevant government departments. If this effort is to move forward, we will support from the government. National crop insurance coverage may have to be a government-led effort,” he said.
On the other hand, farmers are interested in crop insurance and market demand appears to offer good potential. Currently, GWI and the Myanmar Rice Federation have agreed to provide crop insurance to the contract farming operations run by private companies, he added.
State-owned Myanma Insurance is also planning to provide weather index-based crop insurance. Myanma Insurance signed a memorandum of understanding with state-owned Myanma Agriculture Development Bank on the matter last December. The effort will receive technical support from Sompo Japan Nipponkoa Insurance Inc.
Myanma Insurance is offering coverage under a one-year pilot project that started last month. The pilot project will cover Pyay township in Bago Region, and Shwebo Ttownship in Sagaing Region. The insurance will cover the losses suffered by farmers due to weather-based disasters such as drought.
Source – https://www.mmtimes.com