On 24th November 2021, a virtual knowledge sharing session on Weather Index Insurance took place. This was jointly organized by the Pensions and Insurance Authority (PIA – the Zambian insurance regulator) and the International Finance Corporation (IFC), and targeted Zambian insurers who are currently exploring the expansion of this product line in Zambia for the benefit of smallholder farmers.

Zambia currently has one of the largest index insurance schemes on the African continent, covering 1 million farmers on average each year. IFC has been involved in the development of this market since 2013.The event was part of the IFC’s ongoing climate insurance and knowledge management activities in Africa.

The IFC and PIA led a discussion on the fundamental concepts of weather index insurance during the first 2 hours of the session, including how it works, the type of risks typically covered by this product (e.g. drought, excessive rainfall, and typhoon/cyclone). The discussion touched on the strengths of weather index insurance, such as transparency in claims computation, quick claims settlement, and ability to provide coverage to farmers at all scales of production. Finally, the IFC team also provided an overview of its weather index experience in Africa and Asia. For the last 3 hours of the session, the IFC invited its partners and clients from other markets – Africa Re, AIICO Insurance Nigeria, Hollard Insurance Mozambique, and Leadway Assurance Nigeria - to share their own experiences, and their innovative solutions to different issues including product distribution and basis risk.