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Farmers Edge, Munich Re building parametric insurance
- September 16, 2020
- William Payne
Canadian digital agriculture specialist Farmers Edge is collaborating with German reinsurer Munich Re to develop data-driven parametric weather insurance. The aim is to combine precise, site-specific datasets with analytics and AI to provide farmers with improved crop protection and instant payouts, and insurers improved risk mitigation and claims automation.
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.
Such 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 collaboration puts Farmers Edge and Munich Re at the forefront of insurance innovation, combating risks associated with parametric coverage while also establishing business resiliency amid the COVID-19 pandemic.
Farmers Edge risk management platform, FarmCommand, can automate data transactions between growers and insurers, reducing costs and improving scalability. The platform is designed to deliver local, high-density insights, powered by AI and robust datasets, such as daily satellite imagery and site-specific weather conditions, to detect claims and trigger instant payouts. Its Smart Claim and Smart Reporting tools provide automated record-keeping, claim predictions and notifications, claim adjustments, crop classifications, and fraud detection.
Farmers Edge weather stations are installed directly on farms. This provides a high level of precision, which can accelerate claims settlements through immediate access to accurate and detailed data.
Parametric solutions are designed to be automated by data and InsurTech features. FarmCommand houses and analyses data to detect and trigger claims automatically.
“As a farmer myself, it was paramount for us to provide a solution to help growers across data-sparse regions access more protection,” said Wade Barnes, Farmers Edge CEO and co-founder. “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.”
“Protecting agribusinesses against risks arising in agricultural production has been a long standing 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.”