Monday, September 30 2019 15:35
Naira Badalian

Pashinyan: Agricultural risk insurance process starts in Armenia 

Pashinyan: Agricultural risk insurance process starts in Armenia 

ArmInfo. The agricultural insurance process starts in Armenia.  Prime Minister of Armenia Nikol Pashinyan announced on his Facebook page .

The prime minister expressed the idea that the agricultural insurance  mechanism still needs to be streamlined, adjusted, improved, but it  must be tested in such a way as to understand its strengths and  weaknesses, according to the logic "a chain is no stronger than its  weakest link," he wrote.

He informed that at the first stage the insurance will cover apricot  orchards and vineyards, and that the risks covered by the insurance  are hail, fires and spring frosts. Farms from Armavir, Ararat,  Aragatsotn, Tavush, Kotayk and Vayots Dzor regions will be insured  against hail and fires, and farmers from Armavir and Ararat will be  able to insure against spring frosts. According to the information,  insurance coverage, as well as agricultural crops falling under it,  will be expanded annually, "until it covers all regions of Armenia."

In addition, it is reported that farmers will be able to choose one  of 5 insurance policies. The size of the insurance premium will be  determined based on a risk assessment on a particular land plot.

So far, with any insurance package, 50% of the amount of the  insurance premium will be paid by the Armenian government, and with  full insurance, that is, simultaneous insurance against all risks -  hail, fire and frost, a 10% discount is expected.

Earlier, ArmInfo reported that the state within the framework of the  agricultural insurance project will subsidize 50% of the cost of the  insurance policy (against the previously mentioned 60-65% - Ed.).  Created by the Agriculture Insurers National Agency (www.aina.am). So  far, the partners of the agency are three companies - Ingo-Armenia,  Rosgosstrakh Armenia and Sil Insurance. They specify the internal  mechanisms for the further servicing of policies for this class of  risks. As part of the pilot project, agricultural risks will be  reinsured by a major Swiss company Swiss Re.  The first insurance  contracts are supposed to begin to be concluded in January 2020.

According to ArmInfo, the German KfW bank allocated a grant in the  amount of 5.3 million euros for the implementation of the pilot  program for the implementation of the agricultural insurance system  in Armenia.

The main grant amount of 4.8 million euros was supposed to be  directed exclusively to subsidizing the purchase of insurance  policies by farmers. The remaining amount of 515 thousand euros went  to cover the costs associated with consulting.

At the same time, the Government of the Republic of Armenia,  represented by the Ministry of Agriculture, will come out with  co-financing of the program in the amount of 5 million euros. The  Climate Investment Funds will also provide 2 million euros, of which  200 thousand euros will be used to subsidize the purchase of  insurance policies, and 1.8 million euros - for consulting services.

A consortium of three companies will handle consulting. 1.9 million  euros were allocated for the creation of the National Risk Management  Bureau in the field of agricultural insurance, the retraining of  personnel and the formation of an appraiser institution, the  development of by-laws and the services of a consulting company. 

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