Agri-Insurance in Serbia

Despite its economic and political importance, the development of the Serbian agricultural sector is still hampered by various constraints. Besides e.g. out-dated production technologies and machinery, a lack of adequate infrastructure (e.g. storage and cooling facilities) and management deficiencies the lack of adequate financial services (mainly longer-term finance and agricultural insurance products) is considered as one of the major impediments to the further development of the sector.

In addition, the agricultural sector is considered as high risk by banks and other financial institutions due to a lack of bankable collateral and guarantees. In this context KfW  has started the Programme “Development of the Financial System in Rural Areas in Serbia” of up to EUR 38 million, which shall provide adequate financial products to rural SMEs comprising mainly long-term investment finance, (to a limited extent) working capital finance and a combination of agricultural working capital loans and agricultural insurance products (agri-insurance).

The Programme comprises two grants, each up to EUR 0.47 million for two implementation consultants. The present tender is limited to consulting services for the introduction, implementation and enhancement of agri-insurance products within the Programme and includes support to one bank and one insurance company, as well as cooperation with the MoAE and the National Bank of Serbia (NBS). 

KfW together with the bank and the insurance company has already developed an innovative agri-insurance product (working capital loan for seed combined with weather insurance) that is being tested in a pilot phase since early 2015.

The requested services of the agri-insurance consultant comprise the following activities:

• Assessment of the test phase of the pilot agri-insurance product and evaluation of the major results and lessons-learned;
• Analysis of stakeholders experience, other relevant projects, and of other relevant documents and information;
• Recommendations on how to proceed with the pilot tested agri-insurance product (e.g. set-up of a roll-out plan, definitions of milestones; stakeholder consultations and workshop);
• Support the bank in fully establishing the agri-insurance product, comprising i.a.
• Fine tuning of product design including pricing;
• Development of a marketing concept and strategy;
• Implementation of marketing and promotion measures;
• Extension of the agri-insurance product to other regions / other agricultural products;
• Assist the bank in necessary organizational and procedural amendments including i.a.
• Organizational and procedural processes;
• Adaption of existing manuals;
• Training of bank management and staff;
• Adaption of the monitoring and reporting system;
• Assist the insurance company in fully establishing the agri-insurance product, comprising;
• Fine tuning of product design including pricing, legal and supervisory requirements;
• Development of a marketing concept and strategy;
• Implementation of marketing and promotion measures;
• Necessary changes in organizational and procedural processes;
• Training of management and staff;
• Extension of the agri-insurance product to other regions / other agricultural products and to other banks;
• Cooperation with MoAE and NBS with the objective to harmonize the new finance product with and integrate it into the overall national development strategy and regulatory framework