Concerted action vital to kick-start agricultural insurance in Ukraine

Ukraine’s black earth soil is the resource to feed the world tomorrow. But farmers in Ukraine still face numerous challenges, not least of which are outdated equipment, the numerous small holdings fragmenting agricultural land and restricted access to credit. Moreover, insurance penetration is very low. To unlock the sector’s full potential, all stakeholders need to cooperate in building a reliable market framework.

In a report unveiled in Kiev on 24 November, Swiss Re provides an overview of the development of Ukrainian agriculture and proposes ways of developing more robust mechanisms of agriculture insurance. The report also publishes the findings of a survey of risk perception and risk management behaviour on 250 larger Ukrainian farms.

Insurance is pivotal for investment in this market and for farmers’ financial stability. The farmers polled cite drought and frost, low output prices and high input costs as the most daunting challenges they face. Despite this, they are still distrustful of insurance, mainly because of limited access to insurance products, the reluctance of banks to accept insurance as collateral, and doubts over fair and accurate loss settlement procedures.

“Ukrainian farmers need access to insurance products that are user-friendly and understandable, that enable transparent, fast and fair loss settlement”, says Reto J. Schneider, Head of Swiss Re’s Europe & Africa Agriculture unit. “A strategy that improves product distribution through the use of different channels, such as banks, brokers, agents, and input providers would also be a great help", Schneider notes.

Summarising the outcome of a recent stakeholder round table in Kiev, attended by insurance companies, brokers and representatives of the World Bank’s International Financing Corporation, Schneider says that participants would welcome the state taking a more active role in making insurance premiums more affordable for farmers.  A new insurance premium system should be designed to channel any subsidies to those really in need and to boost the low level of insurance penetration on arable land currently at only 2%.

Published 30 November


Insuring the future for Europe:...

The priorities set by the European Commission reinforce Swiss Re's view on how the insurance industry can help insure the future for Europe.

Read the whole story

Swiss Re at WEF 2014

Building resilience requires many components, including country risk management and food security.

Read the whole story


Write a comment

Comment Policy
(All fields marked with * are mandatory)

In our ongoing efforts to improve the quality and relevance of our publications, we would like to know more about you.

*mandatory

Interested in subscribing to our content? Visit our subscription page

Remember me

We use cookies to gather information that will help us provide the best possible service. By using this site, you are accepting our cookie policy.

In our ongoing efforts to improve the quality and relevance of our publications, we would like to know more about you.

* required fields

Interested in subscribing to our content? Visit our subscription page.

Close
Close

Show local contact for:

SWITCHBOARD

  • Zurich +41 43 285 2121
  • MUNICH+49 89 3844 0
  • HONG KONG+852 2827 4345
  • LONDON+44 20 7933 3000
  • ARMONK+1 914 828 8000
Show Location

Subscribe to Newsletters

Subscribe to Newsletters