Aon has formed a partnership with the AfDB and Kenyan artificial intelligence (AI) start-up Amini.
The alliance aims to expand the availability of crop insurance in Africa, bolster the resilience of smallholder farmers, and speed the adoption of environmentally friendly practices.
According to the AfDB, Africa is home to 65% of the world’s uncultivated fertile land.
Lack of environmental data has impeded the growth of the agrifood industry, hindered the extension of agricultural crop insurance and prevented regenerative farming practices, Aon explained.
Only 3% of smallholder farmers in sub-Saharan Africa have adequate crop insurance, making them extremely susceptible to harsh weather occurrences, it added.
Under the alliance, Aon will leverage the data provided by Amini to support the AfDB’s Africa Climate Risk Insurance Facility for Adaptation.
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The UK-based insurance company aims to develop de-risking solutions and increase its ability to evaluate and track the evolving risk landscape throughout the continent.
Additionally, the partnership aims to support Aon clients in better managing the complex impacts of climate risk, particularly those with broad supply chains or balance sheet exposure to agriculture.
Aon president Eric Andersen said: “Risk capital is a vital component of the climate transition and insurance stakeholders needs to innovate faster to address the world’s rapidly changing needs. Our collaboration with the African Development Bank and Amini is a perfect example of a more holistic approach to risk.”
AfDB vice-president Beth Dunford said: “The Africa Climate Risk Insurance Facility for Adaptation is a model of how strategic collaborations can significantly advance our efforts in climate risk management and agricultural sustainability.
“Aon’s global experience in risk management, combined with Amini’s technological innovation, forms a strong alliance that supports the bank’s vision for a resilient agricultural sector capable of withstanding and thriving amidst the challenges posed by climate change.”
In late October, Aon reported a 12% increase in net income during the third quarter of 2023.