Farmers, brokers, and insurance experts gathered to discuss the importance of agricultural insurance beyond catastrophic losses during day three of the Land Bank lunchtime conversations with Food For Mzansi at Nampo Harvest Day in Bothaville, Free State.
Lefa Ndlovu, head sales and distribution at Land Bank Insurance Company, highlighted the institution’s long-standing commitment to agriculture. This legacy brings deep industry knowledge and credibility, but the bank also looks to the future.
Ndlovu said Land Bank has introduced index insurance, an innovation designed to make coverage more accessible and affordable, particularly for smallholder farmers.
“We understand the needs of farmers. We’re putting the effort in line with the Land Bank mandate. We’re also very deliberate about development, and in that instance, also look at how we are able to innovate around the risk,” he said.
Understanding the role of brokers
Ndlovu noted that brokers are essential in helping farmers, particularly those in remote or underserved communities, to understand the complexities of insurance. He highlighted that many farmers often struggle to grasp the true value of agricultural insurance. By breaking down policy information and matching coverage to the specific needs of each farmer, brokers enable them to safeguard both their operations and income.
Itumeleng Mabote, a broker at TMT Risk, addressed one of the most pervasive myths in the industry. Mabote emphasised that even the smallest incident can disrupt operations, and brokers are available to help farmers understand and access support through tailored products.
“Most farmers think that only when the big stuff happens, only when the damage is made, is when insurance is needed. That is the biggest misconception of all.”
Mabote explained that no matter the scale of your farm or whether you’re involved in crop or livestock production, insurance is a fundamental part of running a successful agricultural operation.
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Land Bank’s index insurance
Solomon Dimo, also from TMT Risk, elaborated on how index insurance works: “What index insurance is, is that it covers two aspects. You have what we call pasture drought index insurance and area yield. It makes it a little bit cheaper in terms of cover, because it’s not specific to any farm. Everybody is affected by the same risk.”
Dimo noted that data is critical to this model, using district-level climate data to trigger payouts and ensure fairness and transparency.
Land Bank’s pilot of the index insurance product has sparked interest and positive response from the farming community. Dimo noted that feedback so far has been encouraging, though challenges around cost and complexity persist, especially for small-scale farmers new to financial services.
He pointed out that many only recognise the product’s true value after gaining a clearer understanding of how it works. As the pilot progresses, Land Bank focuses on ongoing engagement with farmers and brokers to strengthen awareness and confidence in the offering.
Safeguarding farming businesses
Shocky Mokwena, a farmer from Mpumalanga with extensive operations, shared her experience of navigating the process.
“It has been quite a lengthy and straightforward process. I think I had to sit in four or five meetings with them before I could really understand it.”
Despite never needing to claim, Mokwena affirmed the value of having insurance, describing it as a good safeguard for her business.
Free State farmer Samuel Koalepe offered a candid take on the personal value of insurance: “If you’ve got insurance, then you’ve got peace of mind. That is what we need as farmers, especially during the planting season.”
He emphasised the value of having a strong relationship with a broker, noting that they can take the time to explain the terms and conditions clearly, something many farmers struggle with due to limited legal knowledge.
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