Climate risks such as drought, frost, hail, diseases and others could heavily impact crop production and result in financial losses to farming businesses and even disrupt the entire agricultural value chain.
AXA Climate’s parametric coverage is structured using third-party yield data such as from public sector sources and calibrated based on the client’s historical yield data. The claims process is transparent and no loss adjusters or farm visits are required to assess the loss.
How does it work?
We structure your coverage with Regional Yield Index and predefine the threshold below the five-year average
We monitor the index and as soon as it is below the predefined threshold…
You receive a payout just a few days after the index data becomes available
Data we will need from you:
- Region of operations
- Crop margin to insure (€)
- Expected planted area in hectares (ha)
Parametric cover for a wheat cooperative
A cooperative wishes to insure itself against various climate risks that may impact its crop production.
Pain point: no coverage is available on the traditional market since cooperatives are not considered to be producing entities.
YIELD insurance solution uses yield data aggregated at the regional level as an index.
With the client, we agree in advance on the level of deductible and set this threshold relative to the five-year average in the region.
In 2016, a prolonged heat wave resulted in a 40% crop shortfall in wheat production.
We applied the pre-defined 10% deductible of the regional reference yield.
The payout of 30% of the Sum Insured was transferred to the client within two weeks upon the publication of the results by a governmental statistical agency.
PARAMETRIC SOLUTIONS FOR THE AGRICULTURAL SECTOR
Climate risks such as drought, frost, hail as well as diseases could heavily impact the crop production and result in financial losses to farming businesses and even disrupt the entire agricultural value chain. How can parametric insurance help mitigate the financial consequences of such risks?