LBIC partners with CelsiusPro to pilot index drought insurance in South Africa

Land Bank Insurance Company (LBIC) has partnered with CelsiusPro to pilot index insurance in South Africa, offering affordable drought-risk coverage for smallholder crop and livestock farmers.

Index insurance is a cost-effective way to protect smallholder and semi-commercial farmers. Payouts are triggered automatically when a pre-agreed index breaches a certain threshold. Since this process doesn’t require claims assessors, it speeds up settlements and increases transparency.

Developed with CelsiusPro, this initiative is supported by grant funding from the Natural Disaster Fund, administered by Global Parametrics Limited, a member of the CelsiusPro Group.

Pascal Siphugu, Managing Director of LBIC, announced that the pilot will launch in five provinces—Eastern Cape, Limpopo, North West, KwaZulu-Natal, and Mpumalanga—which collectively cover 75% of South Africa’s smallholder farmers.

Siphugu explained, “Drought is the main risk affecting the vulnerable farming communities in South Africa, a semi-arid country. The country is also vulnerable to climate change and El Niño which can further exacerbate drought.”

“As such, an insurance product of this nature is critically important for the sustainability of agriculture in South Africa, with approximately 250 000 smallholder farmers and a further 1.5 million subsistence farmers largely uninsured due to a lack of tailored agricultural insurance solutions for this market segment,” he said.

The rollout of the index insurance will begin in the third quarter of this year, with awareness and training for the livestock index product.

CelsiusPro will implement a customised digital solution for LBIC using its White Label Platform technology, automating the entire product distribution process and managing everything from pricing and policy administration to monitoring and claims settlement.

Mark Rueegg, CEO of CelsiusPro Group, commented, “We are delighted to partner with Land Bank Insurance Company to accelerate the role of index insurance in strengthening climate resilience and food security in South Africa.”

He added, “We look forward to deploying our platform technology to support LBIC in introducing innovative agricultural insurance products to the South African market. This project further underscores the scalable impact of the catalytic grants of the Natural Disaster Fund.”

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