Payment of Claim/Compensation
It is an indisputable fact that the primary reason for taking insurance cover is to be paid compensation in the event of a loss occasioned by an insured peril. This helps the farmer under the Anchor Borrowers’ Programme to recoup his production expenses required to keep him in business and also meet the demand and objective of the programme.
For a farmer under the programme to qualify for NAIC indemnity, the following conditions must be met:
The farmer must be a beneficiary of the Anchor Borrowers’ Programme
The insurance cover must have been obtained before the loss occurred
The farmer must have a valid insurance cover at the time of the loss or damage
The farmer must have followed laid down practices for crop production
The cause of damage or loss must be one of the risks covered by the insurance policy.
The notification of the damage must be made within the stipulated time in the policy.
The farmer must have satisfied other conditions as specified in the policy document.
Since inception of the programme in November, 2015, a total of 2,345 loss notifications have been received from participating farmers, due to flood, windstorm, pests and diseases. Presently, 80% of these claims have been paid while the remaining ones are at various stages of settlement through the disbursing banks.
Claim settlement under the Anchor Borrowers’ Programme is the major function of NAIC’s risk management. Claims investigation and assessment are treated with utmost dispatch to ensure timely payment of indemnity to the affected farmers.
Challenges and way forward
The provision of risk management services under the programme is not without some challenges and prominent among them are:
Delay in the remittance of premium to NAIC by the participating Banks.
Lack of awareness and enlightenment on agricultural insurance by most farmers under the programme.
Inadequate documentation of farmers and their projects e.g. location of farms, size etc.
Late reporting of claims by the farmers.
Non adherence to improved and recommended management practices by some farmers, for example the use of bad rice seeds for planting.
The Nigerian Agricultural Insurance Corporation in its efforts towards ensuring a prosperous future and way forward for the programme will ensure and canvass for the following:
CBN as coordinator of the entire programme should continue to ensure all stakeholders work closely towards the success of the programme.
Early remittance of premium to NAIC by Banks to ensure commencement of insurance cover at the time of planting.
Provision of effective technical assistance to farmers, extension workers and Banks by the project monitoring team of which NAIC is a member.
Enhanced monitoring of project by NAIC and other stakeholders.
Increased enlightenment and awareness about the programme and the insurance services provided by NAIC.
Full and timely documentation of farmers by all stakeholders.
Early submission of insurance proposal to NAIC by the Banks.
Prompt and early reporting of losses to enable an immediate assessment of loss or damage by NAIC.
Provision of adequate infrastructural facilities like four wheel drive vehicles, GPS farm measuring devices and other farm extension kits for effective monitoring of projects.
Prompt and early settlement of claims by NAIC to enable farmers recoup their investments and go back to production again.
Strict compliance with the operational guidelines of the programme by all stakeholders.
The Nigerian Agricultural Insurance Corporation (NAIC) is poised to remain a leader in the provision of risk management services to farmers under the Anchor Borrowers’ Programme and to all other farmers in the Agricultural value chain in the country.
The Corporation is determined to continue to create a mass awareness of the benefit of insurance to all agricultural beneficiaries of the programme and farmers are encouraged to take advantage of NAIC services to ensure that their investments remain adequately protected from natural hazards.