Munich Re partners with Fairfax-backed Farmers Edge for parametric weather insurance
Munich Re has partnered with Fairfax Financial Holdings-backed digital agriculture specialist Farmers Edge to develop data-driven parametric weather insurance solutions.
The strategic collaboration aims to "transform traditional parametric coverage models into scalable and profitable solutions", using site-specific datasets with science-based analytics and artificial intelligence.
Agricultural parametric insurance covers areas that are excluded from all-risks indemnity policies, such as excess moisture or heat, to protect growers against unpreventable high-intensity and catastrophic losses. These policies are designed to offer claim payouts as soon as events are triggered, eliminating the typical loss adjustment and reporting period. However, these parametric weather policies may carry significant risk across data-sparse regions due to insufficient publicly available data.
The companies claim that their solution will allow farmers to gain crop protection and instant payouts while insurers gain key insights and tools to mitigate risk, automate claims, and provide faster payouts to customers.
“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,” said 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.”
Wade Barnes, Farmers Edge CEO and co-founder, said: “As a farmer myself, it was paramount for us to provide a solution to help growers across data-sparse regions access more protection. By working together, we’re able to bring the highest degree of accuracy available and couple it 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.”
