Zambia: Climate Risk Insurances

Eastern Province in Zambia is characterised by small-scale farming structures and at the same time is particularly affected by the impacts of climate change. To address these challenges, different actors – including the Zambian government, GIZ and WFP – are working to introduce climate risk insurance among the region‘s smallholder population. In the GIZ project “Climate resilience through risk prevention and innovative climate risk insurance in Zambia” (CRIIZ), this is combined with other measures that are intended to increase income and reduce vulnerability to extreme weather-related crop failures and associated consequences. The combination with training programs on the use of climate data, income diversification and climate-resilient agriculture is especially well received by smallholders. However, the acceptance and effectiveness of climate risk insurance are lower. Microfinance institutions and insurance companies have a largely positive attitude towards the approach, but especially inaccurate indices and lack of clarity about the general functioning of insurance lead to scepticism and frustration on the part of smallholder farmers. Overall, some good approaches can be identified, but in many places the instrument of climate risk insurance needs to be adapted and further developed. AVE Good Practice Reihe, vol. 2023, no. 29b