South Africa’s first group of 13 black crop insurance brokers excelled in their first summer production season.
Dini Nondumo, executive manager for sales and distribution at South Africa’s the Land Bank Insurance Company (LBIC), at the recent Nampo harvest day said the company had hoped to collect between R2 million and R5 million in premiums in the 2016/’17 season.
It eventually sold R28.3 million in premiums.
Maniki Rakgalakane, managing director at the LBIC, said they are training another group of black brokers for the 2017/’18 season.
They are all independent brokers who are accredited and approved to sell LBIC’s crop insurance, as well as its new asset insurance. They also sell multi-risk crop insurance and extended hail insurance policies to everyone, not just emerging farmers.
“Emerging farmers are obviously their preferred target, because of their ability to overcome language and culture barriers, and given the central role emerging farmers have to play in transforming the sector,” said Rakgalakane.
“We find that these brokers are successful to a man.”
Rakgalane said with the help of LBIC consultants, the need for consumer education on the purpose of crop insurance was identified as the biggest problem in the market.
“Crop insurance is seen as expensive, because of a lack of insight on the advantages and disadvantages of such coverage. These brokers aim to cultivate greater understanding on the complete product presentation.”
Rakgalakane said black brokers move beyond communication barriers and relay information in a way emerging farmers understand. They also support corporate projects with big schemes for emerging farmers, where education on the importance of insurance is needed.
Rakgalakane hopes black brokers will in five years’ time, through growth in the sector, be responsible for 30% of LBIC’s income.
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