Developing Agri-Insurance Industry in Ukraine

Ukraine Agri-Insurance Development Project

2007 - present

www.ifc.org/ukraine/ag-ins

Supported with funds from the Canadian International Development Agency (CIDA)

The IFC Ukraine Agri-Insurance Development Project aims to boost the use of agri-insurance as a risk management tool by establishing a sustainable agri-insurance system based on public-private partnership, enhancing the technical capacity of insurance companies and fostering access to finance via the use of insured crops as collateral.

The Challenge

Ukraine was the world’s third largest exporter of grain in 2009. With some of the best soil in Europe, Ukraine can play a key role in mitigating the world’s food crisis. However, its agricultural production is exposed to many natural threats beyond producers’ control. As shown by global experience, and particularly that of Canada – which is IFC’s partner in the project – agri-insurance is well suited to be an efficient risk management tool to protect producers against weather risks, stabilize their incomes, and help restore production after unfavorable climatic events.
Development of agri-insurance in Ukraine is hindered by poor understanding of risk management in the farm sector, weak technical capacity of insurance companies, the lack of actuarially-sound insurance products, limited or no access to re-insurance, and lack of trust by farms towards insurance in general. The inability to effectively manage risk at the farm level consequently limits the ability of farms to access finance and grow their operations.

IFC Approach

Develop legislation in close cooperation with government agencies to implement a public-private partnership as a prerequisite for the efficient regulation and implementation of well designed agri-insurance programs, protect agricultural produce against weather risks and enable them to regain production capacity after catastrophic events.
Support the establishment of an agri-insurance pool through an association of companies active in agri-insurance.
Increase awareness of agri-insurance among Ukrainian producers through extension and media campaigns as well as dissemination of information and training events.
Work with Ukrainian banks to increase their expertise in rural lending and developing and marketing financially-viable loan products with the use of insurance as collateral.

Development Results as of January 1, 2010

• Provided advice to more than 170 entities, 40 of which received in-depth assistance
• Drafted/contributed to the drafting of 11 new laws/regulations
• Completed more than 30 reports, including The Strategy for the Development of Agri-insurance in Ukraine
• distributed more than 13,000 copies of printed materials
• conducted over 130 workshops for over 2,400 participants, close to 1,000 of whom were women
• helped improve 11 procedures/policies/practices
• helped enact the law on agri-insurance.

For more information please contact: Gary Reusche, Project Manager, GReusche@ifc.org