Global reinsurance giant Munich Re has teamed up with digital agriculture specialist Farmers Edge to deliver large-scale parametric weather insurance solutions for the farming sectors.
Making use of cutting-edge technologies that provide highly specific field-centric data and make use of artificial intelligence, the pair aim to deliver revenue protection risk transfer solutions for the agricultural marketplace across the U.S. to begin and ultimately we’d imagine around the globe.
These data-driven parametric weather insurance solutions, developed utilising Farmers Edge’s technology and backed by reinsurance capital, underwriting and structuring expertise from Munich Re, are hoped to “to transform traditional parametric coverage models into scalable and profitable solutions for all stakeholders.”
As a result, growers can benefit from robust crop protection and instant payouts, while insurers will benefit from key insights and tools that enable them to more confidently mitigate risk, automate claims, and provide faster payouts to customers.
Parametric insurance in agriculture can cover a broader range of exposures than the more typical all-risks indemnity policies, the two companies said.
Crop perils such as excess moisture or heat can be protected against, which are considered unpreventable high-intensity and catastrophic losses for growers.
The parametric policies are designed to offer claim payouts as soon as they are triggered by a specific event, removing the reliance on a typical loss adjustment and reporting period.
However, the pair note that parametric weather policies can carry significant risk when implemented in a data-sparse regions, due to insufficient publicly available data.
Munich Re and Farmers Edge hope to close this data gap for parametric agricultural insurance, “combating risks associated with parametric coverage while also establishing business resiliency amid the COVID-19 pandemic. ”
Utilising the Farmers Edge risk management platform, FarmCommand®, insurers can benefit from a powerful digital connection to securely automate all data transactions between themselves and growers, driving administrative costs lower and improving the scalability of their solutions.
The Farmers Edge platform promises “hyper-local, high-density insights, fueled by AI and robust datasets–such as daily satellite imagery and site-specific weather conditions–to detect claims and trigger instant payouts.”
The goal is to provide a completely automated parametric insurance solution, that will be transparent at the same time to insurers and their customers as well.
“This acute level of precision combined with Munich Re’s vast reinsurance expertise provides growers with secure protection that mirrors the impact of weather events as they occur on their fields,” the companies said today.
“As a farmer myself, it was paramount for us to provide a solution to help growers across data-sparse regions access more protection,” explained Wade Barnes, Farmers Edge CEO and co-founder. “By working together, we’re able to bring the highest degree of accuracy available paired with intuitive tools to deliver instant payouts and superior risk management solutions that support global sustainability. This collaboration completes the missing piece of the longstanding parametric puzzle—controlling risk with better data—and gives insurers a clearly defined competitive advantage to attract new customers and enrich existing relationships.”
“Protecting agribusinesses against risks arising in agricultural production has been a longstanding tradition within Munich Re. Our aim is to improve the access to required coverages by extending the boundaries of insurability,” added Rainer Hartmann, Head of AgRisk Partners in Munich Re. “The collaboration with Farmers Edge brings an important piece to the table. The performant accessibility to accurate data allows the design of individual coverages on a parametric basis addressing the specific risks and helping commercial operations to manage their exposures.”
Munich Re & Farmers Edge team up on parametric agricultural insurance was published by: www.Artemis.bm
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Original Article Posted at : https://www.artemis.bm/news/munich-re-farmers-edge-team-up-on-parametric-agricultural-insurance/