A new system of insurance for agro-industrial complex has been introduced in Kazakhstan

A new system of insurance for agro-industrial complex has been introduced in Kazakhstan

A new insurance system for the agro-industrial sector has been introduced in Kazakhstan. The insurance operator is the Fund for the Financial Support of Agriculture - a subsidiary of the KazAgro Holding, the press service of JSC "Fund for the Financial Support of Agriculture reports.  

"In comparison with the mandatory form of insurance in crop production, which has been in force since 2004, the new one has several new features. Firstly, insurance in the sphere of agricultural sector is now voluntary. Secondly, there are no industry restrictions - it is possible to insure any directions within the agrarian sector. Thirdly, state support in the form of insurance premium subsidies is provided. It is aimed at stimulating commodity producers and cheapening the insurance contract by half: 50% of the insurance premium will be subsidized by the state, for which about 2.5 billion tenge has been allocated from the national budget this year," the report says.

Managing director, member of the Board of the Fund for Financial Support of Agriculture Askar Kaliyev noted that in the development of the new system the problematic issues of compulsory insurance in crop production were taken into account. Thus, to protect the interests of agricultural producers in the system only insurance companies licensed by the Agency for Regulation and Development of Financial Market will be able to work. 

In addition, according to him, three international reinsurance companies with rating "A" in the world insurance market were brought into the system. They will reinsure the risks assumed by domestic companies. It will provide guaranteed payments in case of occurrence of insurance risks.

All procedures, starting from the contract conclusion and up to payments, will be performed on the electronic platform based on the electronic digital signature of the agricultural producer. Automation of processes will minimize the human factor and ensure transparency of work.

"As of today, the Fund for Financial Support of Agriculture has approved insurance products based on the index of moisture in soil - its shortage and oversupply. In other words, an agricultural producer can insure his crops against summer drought and autumn rains. Grains (wheat, barley, corn, oats) and oilseeds (sunflower, rapeseed, flax) crops are subject to insurance. For monitoring purposes, the information will come from remote sources of land sounding. Monitoring of moisture level is carried out on a permanent basis, so the fact of an insured event is recorded automatically," said Askar Kaliyev.

Having received a notification (in the account on the website and on the personal e-mail) about the occurrence of an insured event, the agricultural producer with EDS draws up an application for payment to the insurance company, which provides payment.

As practice shows, more than 60% of insured cases are due to lack of moisture, i.e. drought. In this regard, as well as taking into account the completion of the sowing campaign, the insurance product against drought becomes particularly relevant.

In order to insure against the risk of moisture deficiency, an agricultural producer must conclude an insurance contract before June 15 this year. The insurance period will cover 3 months - from 15 May to 15 August 2020.

Insurance contracts against moisture oversupply must be concluded before 15 August, and the insurance cover will be valid from 15 August to 15 October 2020.

As the insurance system in the agricultural sector develops, the list of insurance products will be expanded taking into account the urgency and demand in the market.

If you have any questions, please contact the JSC "Fund for Financial Support of Agriculture" by phone: +7 (7172) 67 84 06

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