* Swiss Re commits $1.25 mln to five-year project
* Three other countries to join project - Oxfam America
* Oxfam, World Food Programme aim for $28 mln funding
By Sarah Mortimer
LONDON, June 10 Swiss Re RUKN.VX is to
reinsure a five-year project that provides drought insurance for
crops in Ethiopia, in a micro-insurance programme developed by
the World Food Programme (WFP) and Oxfam America.
The world's biggest reinsurer will commit $1.25 million to
the project, it said at the Agricultural Risk Management
conference on Friday, which will cover the contract with farmers
in Ethiopia as well as three future and yet to be determined
The move comes as insurers seek ways to capitalise on the
fledgling micro-insurance sector which insures low-income people
against specific perils in exchange for premiums proportionate
to the likelihood and cost of the risk involved.
The initial project will allow Ethiopian farmers to use
labour to pay for a weather index-based insurance contract that
will compensate if a severe drought event hampers crop growth.
National insurers Africa Insurance Company and Nyala
Insurance Company will insure the crop contracts, while Swiss Re
will provide the reinsurance for the project - which has been
co-ordinated by the WFP and Oxfam America.
WIth the country facing a drought-induced food crisis the
United Nations appealed for $75 million in food and other aid in
April for 2 million people in Ethiopia's southern region. [ID:
Ethiopia is one of the world's largest recipients of foreign
aid, receiving more than $3 billion in 2008, according to the
New York-based Human Rights Watch.
Oxfam America said it hoped the insurance initiative would
prompt more products to include coverage for live stock in the
"We are providing insurance to those who cannot afford it.
We have seen micro-insurance take off in the life, property and
credit sectors. Agriculture is the final frontier," said David
Satterthwaite, senior global micro-insurance officer at Oxfam
In 2009 the first micro-insurance fund LeapFrog Investments
launched with Zurich ZURN.VX, Munich Re (MUVGn.DE), Allianz
(ALVG.DE) and SCOR (SCOR.PA) as members.
The micro-insurance project in Ethiopia will start in
November and Oxfam and the WFP want to raise a total of $28
million for the programme.
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(Editing by Greg Mahlich)