Key Challenges in Agriculture
The agricultural industry is increasingly exposed to climate volatility—droughts, floods, heatwaves, and erratic rainfall patterns are becoming more frequent and severe. These environmental risks are often widespread and hard to quantify, making them difficult to insure through traditional means.
At the same time, traditional crop insurance is retreating in many regions due to high loss ratios, administrative complexity, and long claims processes. Many insurers are scaling back coverage or exiting agricultural markets altogether, leaving farmers and agribusinesses with fewer options. Other key challenges include:
- Slow and disputed payouts that strain cash flow during critical recovery periods
- Lack of data-driven solutions tailored to regional or crop-specific needs
- High premiums and exclusions that limit accessibility
- Inadequate protection for systemic risks, such as prolonged drought or extreme heat
These challenges demand a faster, more transparent, and scalable risk transfer solution—one that modern parametric insurance is uniquely positioned to provide.
Solutions We Provide
Parametric insurance provides coverage based on measurable environmental conditions—such as daily rainfall totals or temperature extremes—rather than actual loss assessments. You select relevant parameters like cumulative rainfall or degree-days, then set a trigger (e.g., “less than 20mm rainfall over 30 days” or “temperatures above 35°C for five consecutive days”).
When the parameter is met, payouts are issued using trusted data sources such as satellite imagery or weather stations. There’s no need for paperwork, on-site inspections, or delays.
Parametric insurance is ideal for managing systemic and hard-to-measure risks in agriculture. We help farmers, cooperatives, and agribusinesses reduce their exposure and build long-term resilience.
Parametric Coverage in 4 Steps
Define the Risk
Identify key events or conditions that could impact operations—such as extreme weather, seismic activity, or economic indices.
Set the Trigger
Choose clear, measurable thresholds (e.g., “wind speed >100km/h” or “earthquake >5.0 magnitude”).
Agree on Payout Logic
Establish how payouts scale with the severity of the event and the level of exposure.
Automatic Monitoring & Payment
Trusted third-party data sources confirm the event. If triggered, payouts are issued automatically—no claims process required.
Our case studies are all over the world
Utilizing Machine Learning and real-time monitoring from satellite imagery & IoT, our state-of-the-art technology helps businesses bounce back faster against climate, cyber and other emerging risks.
Our product is specifically suited to
- Mid-sized and large agribusiness
- Cooperatives
- Agricultural input providers and distributors
- Commodity traders
- Banks and insurers
Key Benefits of Parametric Insurance
✓ Clear, Measurable Triggers
Policies are based on objective data—so there’s no ambiguity about when payouts happen.
✓ Tailored Coverage
Each policy is built around the client’s specific risks and budget, filling gaps traditional insurance cannot.
✓ Fast, Automatic Payouts
When a trigger is met, funds are paid quickly—no claims process, no delays.
✓ Flexible Use of Funds
Payouts aren’t tied to proven losses, giving clients immediate support for any financial impact.
FAQ
Why is parametric insurance important for farmers and agribusinesses?
Climate risks like droughts, floods, storms, and frost can severely reduce yields and incomes. Parametric solutions offer fast, predictable compensation that helps your clients stay financially stable despite these shocks.
Which climate risks can parametric insurance cover?
Typical risks include drought, excess heat, floods, heavy rain, low crop yields, frost, and wildfire.
Who in the agricultural value chain benefits from this coverage?
- Producers & Cooperatives: Protect yields, revenues, and debt obligations.
- Processors, Traders & Agribusinesses: Manage supply disruptions and procurement costs.
- Food & Beverage Companies: Reduce continuity risks and protect margins.
What is the current protection gap in agriculture?
In Europe, €28.3 billion are lost annually due to climate events, but only 20–30% of these losses are insured. This leaves €3 out of every €4 uninsured.
What types of data are used to trigger payouts?
Parametric insurance relies on verified third-party data such as satellite imagery, soil moisture indices, weather station reports, or crop production data. This ensures transparency, reliability, and avoids costly on-site inspections.
Our success story
Contact Us
Whether you're quoting a complex risk, looking to break into new markets, or just curious about parametric insurance, our team is here to help you win. Reach out and we will get back to you within 48 hours.
