New insurance system means shifting from the existing coverage of some crops against some risks to the full coverage of all crops, as explained the Minister of Agriculture, Costas KADIS.
According to him, both farmers and the state will contribute to the fund for protection and insurance of agricultural production as well as participate in the fund management, yet this fund still requires approval by the parliament. At that the amount, to be contributed by farmers, will depend on the risk level their products face extreme weather conditions and natural disasters. As estimated, farmers' contributions will range from EUR 1.90 to EUR 32 per 1 m2, depending on the crop production, while sheep and goat farmers will contribute EUR 0.80 per a livestock unit.
As KADIS explained, the new system offers a flexible scheme aiming to provide immediate compensation.
In terms of the state, the contribution amount is similar to what is being spent today, but depending on future weather conditions, the state will also cover the farmers' contributions in cases when they are not able to do it. The system is expected to be launched in 2019 and will replace the current Agriculture Insurance Organization, functions of which will be transferred to the Ministry of agriculture.
The Cyprus insurance sector has seen impressive growth over the last few years, even overcoming pre-crisis levels. The market has been proving its ability to adapt to increasing regulation and challenges. Although the local insurance market is small and highly competitive, it manages assets well over EUR 2 billion, making the insurance industry one of the largest institutional investors in Cyprus. "We are very optimistic about the future of the insurance sector in Cyprus. The insurance industry has overcome the challenges of the last few years and has successfully entered a solid growth path. In the absence of any unexpected shocks, we are confident the insurance industry will keep getting stronger and stronger", said Stephie DRACOS, Director General Insurance Association of Cyprus (IAC).
Please, check the insurance sector survey and the detailed country report, provided by the CyprusProfile, which can be found here (with an analysis of the insurance market on page 106).