Saham Assurances, one of Morocco's biggest insurers, has announced that it will relaunch a farm insurance scheme this year that it had suspended in January following an outcry against the company's participation in the plan.
The relaunch decision was announced by Saham Assurances CEO Mr Mehdi Tazi in March, according to local media reports. Mr Tazi said: “The agreement that we signed with the government was temporarily stopped in order to give others time to express their interest in the agricultural insurance sector.”
However, to date, no other insurer has stepped forward with a proposal.
Under the agreement signed with the Ministry of Economy and Finance and the Ministry of Agriculture, Saham Assurances was to offer farm insurance with effect from 21 January 2016. The new product, "Al Taamine Mahssol", would cover cereal crops and other produce against major climatic hazards such as drought, waterlogging, frost, hail, strong wind and sandstorm.
The state would provide a subsidy to farmers of up to 90% of the premium. This followed the success of a previous experiment by Moroccan Agricultural Mutual Insurance (Mamda), whose "multi-risk climate" product helped increase the area covered by agricultural insurance from 30,000 hectares in 2008 to 1 million hectares in 2015.
However, as soon as "Al Taamine Mahssol" was launched in January, Saham Assurances attracted allegations of conflict of interest because the Minister for Industry, Mr Moulay Hafid Elalamy, is the founder and President of the Saham Group. Saham Assurances suspended the insurance scheme on 24 January.
Mr Fehd Bouab, Financial Director at the Ministry of Agriculture, said that since the first such farm insurance agreement by Mamda came into effect, no other insurer except Saham Assurances had submitted a proposal for agriculture insurance.
Mr Bouab said that the government is promoting agriculture insurance because there is a need for such protection, particularly with the growing risks associated with climate change. “We will be most happy to see other insurers show interest. . . as the agricultural sector has a need for this cover,” he said.