Parametric Spring Frost Insurance: a new form of protection for the wine industry

As weather patterns shift, European wine growing regions are highly susceptible to spring frost, destroying harvests and balance sheets

France, the world’s second-largest wine producer – following Italy – took a massive production hit after severe spring frost and summer rain destroyed vines. 2021 saw one of the worst years for wine production in France. 2022 followed suit with similar patterns, causing alarm that early frost is becoming the norm across wine growing regions. This has led to a challenging insurance market, where traditional policies have fallen short in providing sufficient, cost-effective cover for the industry. 

Many wine regions have taken the full brunt of spring frost, including Bordeaux, which had 10,000 hectares destroyed following a 2021 event that left harvest to fall below the five-year average. As climate change intensifies, we see weather pattern correlations with increasing temperature volatility at critical periods in the growing process, resulting in more significant financial losses. 

Traditional insurance for vineyards is often unaffordable, limited or does not reflect the uneven exposure of different field locations, making it challenging for clients to feel assured for the harvest season. Parametric products are an innovative alternative for vineyards seeking efficient, customized coverage that comes with a swift payout, enabling clients to bounce back faster after an event. By monitoring temperatures frequently, clients can also be aware of when a frost event may be nearing, allowing them to take preventative measures. 

Vineyards can’t take on spring frost alone – Descartes’ parametric insurance offers an alternative solution

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