The main challenges for the agricultural insurance market in 2020
As everywhere, the global propagation of COVID-19 in 2020 unquestionably brought some new challenges to Agricultural Insurance too. Business professionals were faced to manage the outbreak periods and to continue providing their services.
According to a recent study of the actual impact caused by COVID-19 pandemics to agricultural insurance markets in 29 countries, made by Agroinsurance, premium volumes and the number of policies remained stable in many countries. Premium and sum insured volumes were affected primarily by weather and market factors(e.g. reduced prices for some agricultural commodities).
“The pandemic affected the operational regimes of the insurance businesses worldwide, the most common challenges indicated by 71% of respondents being the inability to conduct face-to-face client meetings and to run the business as usual due to the imposed regional travel restrictions (74% of the responses received).” Insurance companies managed to make quick modifications to their strategies to communicate with farmers remotely.
COVID-19 became an influencing factor, which encouraged insurance companies to focus on new technologies and solutions more seriously, dedicating more attention to implementing changes to key procedures and protocols.
At the same time, satellite imagery became more affordable from a cost perspective. A number of insurers contracted satellite data providers to assist them with crop inspections and crop condition assessments. The satellites’ revisit time has been reduced significantly in the last several years, with more instruments operating on the orbit, which leveraged the usefulness of satellite applications versus drones.
Covid-19 leads us to once again remembered that food and agriculture are crucial sectors for every country. All elements in the agricultural production and food chain have been identified as critical sectors in our country.
The AgroInsurance team agrees that loss assessment was moderately affected by COVID-19, 45% responded that some changes to the procedures and protocols have been implemented.
In general, the most common challenge experienced by the majority of respondents with every type of farmer was the planning of on-site visits. It has also been noted that due to local lockdowns and restrictions, some farmers missed an opportunity to update their yield records.
Survey respondents indicated that technologies applied for underwriting and loss assessment during the 2020 pandemic mostly included: i) satellite remote sensing (68% of responses) and ii) weather data sets (68% of the responses), followed by digital maps (55%) and GIS software (53%).
Some companies accepted and applied photos and videos provided by the insureds during loss assessment (37%); drones were also more frequently applied (29%). Weather data from automatic weather stations (29%), data from combined yield monitors (29%) and soil moisture data from field sensors (16%) were applied as well.
According to the respondents, satellite remote sensing is the most needed one, with 76% of survey respondents choosing this answer.
Top requirements for Satellites
Requirements for satellites:
– Increased re-visit times for new satellites and satellite constellations;
– Higher numbers of satellites on orbit including specialized agricultural large and microsatellites;
– Further development of equipment installed at the satellites with enhanced resolution and more specific data delivered quickly to the end-users;
– Adjustable platforms with specialized solutions for agricultural insurers (underwriting and loss adjustment), which can be integrated into the insurers management information systems;
– Enhanced solutions for agricultural insurance including crop identification, yield assessment, livestock tracking, property inspection, etc.
Now more than ever, the development and implementation of new technologies and remote sensing tools are going to be essential to the AgInsurance market to reduce manual process and analysis, to faster and more efficient management of insurance policies and reduction of management costs.
Click on the link to get the full version of the Covid-19 Pandemic and Agricultural Insurance Market report from Agroinsurance International.