Analysis of the Genillard & Co. Report: "Crop Insurance in Europe"

“Understanding tech solutions and adapting them to the specific needs in the crop insurance value chain needs to be the next priority area going forward, with a wider sharing of the success stories in the agro insurance community.”- Christopher Genillard.

The report “Crop Insurance in Europe” by Genillard & Co. offers a crucial and timely analysis of the European crop insurance landscape. While the global crop insurance market size increased to US$ 43.7 billion in 2023 and is expected to reach US$ 69.9 billion by 2032, Europe’s crop insurance market must undergo significant changes to address crop yield reductions caused by extreme weather events.

The report builds on previous research to illustrate the connection between extreme weather events—such as droughts, extreme temperatures, and floods—and crop yields. These events decrease crop yields, increase costs, and reduce farmers' income. European farmers are increasingly facing extreme weather events, and crop insurers must develop predictive models for future yield losses. The report forecasts a 20% increase in reinsurance costs across Europe in 2024.

Crop insurers can play a vital role in risk management strategies to enhance farmers' resilience and facilitate adaptation to increasing extreme weather events. The differences in crop insurance experiences across Europe provide an opportunity to analyse the most efficient insurance products. This underscores the necessity for regionally tailored adaptation strategies that address each region’s specific threats.

Public-private insurance schemes are a promising solution in various crop insurance markets across the region. These models offer a crucial safety net for farmers by distributing the risk between the government and the private sector. Initiatives such as AgroSeguro in Spain, the National Crop Insurance Solidarity Scheme in France, the Agricat Obligatory Catastrophe Crop Insurance in Italy, and the Public-Private Crop Insurance Fund in Hungary represent successful alternatives to government subsidies.

The report emphasizes the importance of innovation and technology in providing tailored solutions for the crop insurance market. Conventional risk assessment methods must be updated with advanced technologies like remote sensing, precision agriculture, and big data. By leveraging these tools, insurers can develop more sophisticated risk models, leading to more accurate pricing and products that reflect the evolving risk landscape.

Additionally, the report highlights the European Environmental Agency’s R&D work on climate change impacts, which can provide invaluable climate data and risk assessments to deepen our understanding of climate impacts on agriculture.

Overall, the market is poised for significant changes in response to increased extreme weather events in European regions. Crop insurers should leverage technology and adaptive risk management practices to provide the necessary solutions to this growing market. For a deeper dive, read the full report here.