Revenue Insurance: Covering Yield and Price Risks. Basic Requirements from an Insurance perspective Global markets have lately been fuelling the price volatility of agricultural commodities to such an extent that farmers often perceive price as being at least as risky as yield. And it is. Its complexity and extremely systemic nature make it a challenge for risk carriers. Managing price risk with crop revenue insurance has attracted much attention in recent years, with only two successful schemes (USA and Canada) indicating the factors most critical for success: ample regional yield-price information, effective ways of price discovery and – most importantly – extensive public support, both for regulation and finances.
Ukraine - Information on Insurance of Winter Crops in 2011 Underwriting Year In autumn 2010, insurance companies signed 729 contracts, including 173 contracts providing the ‘full cycle’ coverage and 25 contracts based on area-yield index. The most popular product amongst the producers was insurance of winter crops against total loss during winter period (286 contracts). One hundred and sixty three contracts within the newly developed winter crop insurance programme were signed (this new product covers the whole production cycle from seeding to harvesting). The programme is being implemented since 2009 and it does not include deductible. The third most popular programme (110 contracts) was the programme insuring crops against total and partial loss.
Insuring an Expanding, Evolving Beast As worldwide demand for livestock increases, managing the associated risks becomes ever more crucial - disease alone is estimated to be responsible for a 20% production loss. But, many farmers are not fully protected. What’s holding things back and which options show the most promise?
Pros and cons of surface-based and space-based meteorological observations While satellite data provide significant advantages over conventional surface-based observations, there are also important limitations in how the data can be used to infer information about the state of the atmosphere. Specifically, information about the atmosphere is obtained indirectly by measuring the properties of electromagnetic radiation arriving at a space-borne sensor. That is, weather variables, such as precipitation or surface temperature, need to be inferred from quantities that provide a proxy for the weather variables of interest.
Agricultural insurance system in Italy. Current status and perspectives. Agricultural activities face risks linked to market trends and environmental conditions, in particular climatic conditions and in Italy the heterogeneity of the territory determines a high variability of conditions and productions. In order to manage risks in agriculture, one the most important instruments used in the Italian agricultural sector is the insurance system, that without doubts can be one of the central climate change adaptation options. In facts, agricultural insurance allows to manage a wide range of risks and it is theoretically enough flexible to adapt itself to changed conditions and priorities.
Ukraine - Winter Crop Insurance for Winter Period 2009-2010 Throughout autumn 2009, 467 contracts were signed to insure winter crops. Most contracts insured against total loss (202 contracts), and partial-total loss (224 contracts). Other products constituted an insignificant share of the companies’ agri-insurance portfolio. The total sum insured was some UAH 268 m. and the total premiums amounted to UAH 14.4 m. In total, 211,500 hectares of winter crops were insured. The average loss ratio was 184 per cent for the whole portfolio however it is significantly different across the companies. The lowest loss ratio was reported at 27.1 per cent and the highest one – at 1,055%.
Crop insurance schemes depend on two things Crop insurance schemes depend on two things: a relatively complex set of mathematical tools and reliable data on many different variables, ranging from weather to agricultural output. Insurance companies can protect farmers from harm, but they need reliable statistics which, all too often, are unavailable in developing countries.
Crop Insurance in the USA (2010) As its proponents hoped, crop insurance has become the largest single source of financial protection to farmers. From insuring 182.2 million acres in 1997, the program has grown to cover more than 264.6 million acres, a slight drop from the 272.7 million acres in crop year 2008. According to National Crop Insurance Services, the program is meeting the Congressional mandate of insuring 80 percent of insurable farmland.
The Role of Reinsurance in Agricultural Insurance Reinsurers are playing often a key role in developing new agricultural insurance markets. In agriculture, finance of inputs and lending for crop inputs is very often linked to the availability of crop insurance and hence reinsurance. Being in the financial service industry Partner Re sees its role in providing risk capital for risk transfer with all the financial services that go along with that process. For Partner Re the sector of agriculture insurance has been defined clearly as a main strategic target.
Agricultural insurance in Europe There is considerable diversity in the range of agricultural insurance schemes available in Member States throughout Europe. Some of these are subsidised by Member States and others purely privately funded. Insurance is probably the best known tool for risk management but the nature of agriculture presents a number of issues. For example, systemic risks (i.e. a lot of people suffer losses at the same time) make it necessary for insurance companies to charge very high premiums if state contributions are not available. These premiums are often unaffordable for many farmers. Because of this, comprehensive agricultural insurance schemes therefore need strong support from the public sector.
30.10.2011 Where the margin is 2012 - conference in Moscow The Conference "Where the margin is" will be held on January 31, 2012, in MOscow in the Radisson Slavianskaya Hotel. The conference is meant for agricultural producers, inputs manufacturers, dealers and distributors, financiers, insurers, agribusiness investors, policy makers. 29.05.2011 Seminar on Index based Weather Insurance - India, July 25-27, 2011 Crop insurance (yield and weather based) is a specialty insurance, the technical nuances of which need to be clearly understood by all the stakeholders. The programme aims at enhancing the understanding of critical issues related to these specialised products and providing a comprehensive technical understanding of the weather index insurance covers in India.
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