Area Yield Index Insurance (AYII)

This is a seasonal cover for crop yield shortfall below the historical average yield in a unit area of insurance (UAI).

How it works:

• Farming areas are divided up into insurance units (UAI’s) since each area my have a different ecology.
• If actual production in the UAI falls below its threshold, all farmers enrolled for AYII in that UAI, receive a compensation.
• This is called Area Yield Index Insurance (AYII).
• Target Crops are; Maize, Sorghum, Soy Beans, Wheat etc.
• AYII premiums is limited and varies per UAI and each UAI have a different premium price based on the risk profile and average yields.
• The premium rate is depended on the location – usually as percentage of the expected yield (sum insured).

Basic cover: Covers physical loss or damage to growing crop directly caused by either Drought, Uncontrollable Pests and Diseases, Hailstone Damage, Flooding, Fire and Lightning, Earthquake, Explosion, Frost and Windstorm.

Crops covered: Maize, wheat, sunflowers, groundnuts, soya beans, sorghum, sugarcane, among others commercial crops.

Rating: Premiums rate varies

Bases of cover: Sum insured either:

• Based on costs of production per unit area(acre)
• Based on pre-agreed nominated value of Long-term average yield per unit (acre).

Commencement of cover: Insurance commences after receiving and acceptance of crop emergence report that states the details about the crop.

Basis of Claim Settlement: Yield shortfall because of listed perils insured. Claims are due for payment at the end of a crop season unless there is total loss happening during the insured crop planting window.