IFC Helps Ukraine Provide Agricultural Insurance to Farmers

March 7, 2010 -- Leading insurers of Ukraine, supported by IFC, established the Agri-Insurance Bureau-- a pool of insurance companies that join their resources to provide quality insurance services to farmers and improve their access to finance.

“Agri-insurance is as necessary as air,” says Halyna Skarga, a farmer from the Poltava Region in Central Ukraine. “Without insurance, no farmer can survive. Crops do not care if they are insured or not. Insurance will not save them from fierce frost, excessive heat or abundant rainfall. However, it will save the agricultural enterprise that will receive indemnities and be able to continue to operate.”

To help Halyna and millions of other Ukrainian farmers sustain their businesses and get better access to finance, IFC Ukraine Agri-Insurance Development Project helped insurance companies establish the Agri-Insurance Bureau to implement international best practices in the agri-insurance sector.
The Bureau, supported by IFC, will help its members to organize quality training programs for the staff, negotiate re-insurance terms, ensure transparent loss adjusting, and conduct education campaigns for farmers. The members will jointly develop and enforce the ethical code of conduct in the market. The goal is that Bureau membership will become a guarantee of quality insurance based on the best international standards.

“There are some things that insurance companies are unable to do separately because of the high cost,” said IFC Operations Officer Gary Reusche, who is the project manager. “That is why they joined in the Bureau, which is the first step towards establishing an efficient and sustainable agri-insurance system in Ukraine.”
With the creation of the Bureau, Ukraine’s agri-insurance sector will be more efficient. Due to modern corporate governance structure, the Bureau will ensure that the interests of both insurers and farmers are taken into account. The government, in turn, will have additional assurance that the funds allocated to subsidize insurance premiums, will be spent transparently and provide real protection for Ukrainian farmers.