Pula to insure over one million farmers in Zambia in 2022

Gianluca Storchi
Pula Advisors
Published in
3 min readApr 12, 2022


In March 2022, Pula was contracted as part of a consortium to offer crop insurance to 1,024,434 farmers in Zambia for the 2021/22 season. The consortium is led by ZSIC General Insurance (ZSICGI) and includes Professional Insurance Corporation Zambia Ltd (PICZ), Madison General Insurance (Madison Gen), and Hollard. This venture builds on Pula’s existing relationship with the Zambian government. In previous seasons, at least 11% of insured farmers received individual payouts of at least $14 (figure 1).

Figure 1: FISP summary information

Source: Pula

This initiative targets beneficiaries through the Farmer Input Support Programme (FISP), which was introduced by the Government of Zambia in 2002. The overall objective of the FISP is to improve the supply and delivery of subsidised, high-quality agricultural inputs to small-scale farmers. This is done through sustainable private sector participation at an affordable cost, to increase farmer household food security and income. In 2017, the Zambian government introduced mandatory insurance for all FISP beneficiaries. Insurance premium payments are deducted from farmers’ payments toward the subsidised input packs. These packs consist of maize seed, sorghum seed, groundnut seed, soya bean seed and fertiliser.

In 2019, Pula came onboard as a technical partner to provide a hybrid insurance product comprising weather index insurance (WII) and area yield index insurance (AYII). The scheme ensures that farmers are comprehensively insured against all major perils, including drought, flood, pests, and diseases. Hybrid insurance allows farmers to receive quick payouts early in an agricultural season through the WII component, enabling them to replant during the season or direct the funds towards other immediate, in-season household needs.

Farmers in Zambia. Source: Pula

Agriculture plays a critical role in Zambia. In 2019, the agricultural sector generated $667 million and accounted for half of total employment. However, while employment in the sector has remained high, its contribution to GDP declined significantly from 17% in 2004 to less than three percent in 2019. This implies that agricultural labour productivity has been declining, and much of the sector has fallen into persistent cycles of low-productivity and mostly subsistence agriculture.

For the government, funds allocated to the agriculture sector through the FISP represent an investment. Part of the government’s return will be expected in the form of increased agricultural productivity and volume, increased income for smallholder farming households, and as a result, improved economic output.

There are a range of factors that threaten crop health and yields. If these were to imperil farmers under the FISP, their harvests would suffer and the government would have no recourse. Adding agricultural insurance to the programme allows farmers whose yields have been negatively affected to collect payouts and replant their crops. The product also makes smallholder farmers more creditworthy to lenders due to lower default risk, and encourages them to invest more in their land.

Pula’s hybrid insurance product aims to safeguard the government’s investment, smallholder farmer livelihoods, and economic welfare in Zambia. This approach has been successful in other countries too. In January 2022, Pula and APA Insurance paid out nearly $750,000 in claims to 11,414 smallholder farmers as part of the government-led Kenya Cereal Enhancement Programme Climate Resilient Agricultural Livelihoods Window (KCEP-CRAL).

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