The results are in: high demand for rainfall insurance in northern Ghana
Greetings from Tamale, Ghana! At the time of our last update, the Examining Underinvestment in Agriculture (EUI) project was gearing up to market insurance to maize farmers in northern Ghana. Preparations included working with the Ghana Insurers Association, Ghana National Insurance Commission, and the Ghana Agricultural Insurance Programme to secure authorization to market the country’s first commercial drought-indexed insurance product.
IPA built on previous years’ experience marketing insurance to maize farmers in northern Ghana to develop a plan for reaching 1,100 farmers this year. IPA named the product Sanzali, the local word for drought, in order to underscore the fact that the product insured against drought. The project team trained insurance marketers, developed marketing scripts for a largely illiterate farmer population, made community entry, and made individual marketing visits to randomly selected farmers from the study sample. The script sensitized farmers to insurance, and provided information about the policy, real-world examples, costs, benefits, and timelines, and allowed for substantial question and answer sessions.
Those farmers who elected to enter into formal insurance contracts with GAIP were able to sign by signature or thumbprint and to pay in cash, and later received official certificates noting their personal information and insured acreage. Throughout the marketing process, the project team closely audited activities to ensure transparency, fairness and compliance.
Because Sanzali was offered, as part of a study, it was offered at three different prices: discounted, actuarially fair, and marked-up. After marketing activities were completed, IPA analyzed demand and found it to be high. Around the Tamale Metropolitan and Savelugu-Nanton districts, 89 percent of targeted farmers were reached for an initial marketing visit, and 50.8 percent of those farmers opted to purchase Sanzali. Demand was 70 percent at the low price, 56 percent at the fair price, and 37 percent at the high price.
In the more rural West Mamprusi district, 89 percent of farmers were reached for the first marketing visit, and 90 percent of those farmers opted to purchase Sanzali! Demand was 93 percent at the low price, 89 percent at the fair price, and 86 percent at the high price.
These results are interesting to the nascent agricultural insurance industry in Ghana, and also to relevant stakeholders such as farmers, agricultural ministries and NGOs, and academics. The project team and the farmers in our study appreciate your interest in and support of this project!