Crop Insurance Market by Type (Crop Yield Insurance, and Crop Revenue Insurance) by Application (Multi-peril Crop Insurance (MPCI), Crop-hail Insurance, Livestock Insurance, and Others), by Distribution Channel (Banks, Insurance Companies, Brokers/Agents and Others)- Global Opportunity Analysis and Industry Forecast, 2023–2030

Market Overview:

Crop Insurance Market size was valued at USD 37.91 billion in 2022, and is predicted to reach USD 59.89 billion by 2030, with a CAGR of 6.1% from 2023 to 2030.

Crop insurance is a comprehensive, yield-based policy designed to cover losses incurred by farmers as a result of production problems. Farmers can purchase this insurance to protect their growing crops against loss or damage brought on by natural disasters like hail, drought, flood, insects, or the loss of revenue due to declines in the prices of agricultural commodities.

A crop insurance plan stabilizes agricultural production and minimizes the adverse effects it has on farmers' livelihoods. Crop insurance has turned into a necessity for difficulties relating to agriculture in light of the current situation.

Favorable governments’ initiatives to augment the market growth

The agricultural sector is one of the most important industries in various countries including India, the US, Philippines and others, but development is being hampered by the increasing risk intensiveness of agriculture due to decreased arable land, climate change, and high labour costs. Therefore, numerous governments are launching favorable initiatives to boost the agriculture industry, which is promoting market expansion.

The growth of the crop insurance sector is being fueled by the promotion of the economic stability of agriculture through crop insurance to increase farmer knowledge and help them establish insurance. For instance, the governments of Canada and Saskatchewan recently announced improvements to the 2021 Crop Insurance Program to give farmers additional coverage and guarantee that they have the risk management resources necessary for their expansion and stability. The market expansion for crop insurance is being aided by such efforts.

Increasing unusual climatic events to fuel crop insurance demand

A rising number of unusual climatic phenomena has led to the growing number of small-scale farmers, as well as big and minor stakeholders in the agriculture industry, have opted for insurance to safeguard against probable losses and failed harvests. The widespread use of crop insurance helps to minimize the financial and crop loss risks faced by insured farmers.

These risks are caused by the rising frequency of unfavorable meteorological conditions, such as rainfall, drought, temperature, frost, and humidity. Moreover, various digital initiatives are implemented to enable prediction of weather and climatic conditions, data-storage related to crops and micro level information about the land for harvesting crops and reduce uncertain risks. These factors are expected to penetrate the crop insurance industry globally.

Lack of awareness of crop insurance and less availability of arable land hinders growth.

The development of the global market may be hampered by a lack of awareness about crop insurance products and schemes. This is attributed to the illiteracy of the farmers and inadequate information about crop insurance, policies and claim benefits.

Additional significant factors impeding agricultural activities and having a limited impact on market expansion include the decline in arable land and the acquisition of land from the farmers owing to rapid urbanization, the rise in smart city projects, and the number of commercial and residential projects being built, particularly in developing countries.

Growth in crop insurance product line to create impetus market growth in future.

Expansion of the current product line is anticipated to present prospective chances for the market development for crop insurance. The value-added services that crop insurance providers provide to their customers and the creation of new product and service offerings through the application of new technologies and partnership agreements greatly contribute to the expansion of the worldwide market.

The application of technologies can assist in registering the information and location of farmers, as well as in the collection of premiums and payment of claims. Insurers can use technology like AI, satellites, and remote sensing data to expand their current company operations and improve the smooth claims procedure and avoid mutual claim settlement processes. Hence, expansion of the current product line and increase in partnerships and agreements are anticipated that crop insurance providers will have attractive prospects in the upcoming years.

North America currently dominates the market.

In North America, agriculture is a significant industry. Canada and the USA are two exceptionally productive agricultural nations that are located in the continent's central lowlands. In this region, only 12% of the continent's total surface is suited for agriculture. However, they produce a lot from their farms. For instance, wheat and corn are well known products of prairie grassland.

Monoculture, a tradition of growing one crop in a region for a long time poses a hazard to agriculture in the tropical and subtropical regions of North America. Due to nutrient loss and the potential for crop disease, monoculture is a risky method of farming. This is not the case when a variety of crops are planted on the same plot. The governments in this region are consistently protecting production through subsidies and agricultural insurances programs. These programs boost the productivity and competitiveness of the agri-food sector in North American region and mitigate uncertainties in agri-food activities.

For instance, AgriSompo North America provides best-in-class agricultural risk solutions through a national network of independently owned agents. Moreover, several regions in the country such as the US and Canada are affected by severe drought conditions, which damages the agri businesses. These factors are responsible for the requirement  and high demand for the crop insurance industry in this region.

Asia-Pacific witnesses substantial growth in the global renewable energy market.

Asia Pacific is the world's leading producer of agricultural products, and the industry is fundamental to the region's economy since it accounts for more than half of the region's land area and employs one-fifth of all workforce. China and India are the leading producers of food in the Asia Pacific region owing to their vast arable land and a large population, which has increased the demand for agricultural produce.

Despite recent considerable increases in production, Asia still produces lower yields than the majority of other regions due to depleting resources like water, deteriorating soil quality, poor logistics, and ineffective farming practises and land use. In addition, severe climatic conditions including flood, typhoon and heavy rain in this region, particularly in countries such as China, India and Japan are responsible for considerably bad harvest and financial crisis of the farmers.

Various countries in this region are adopting various crop insurance programmes to support the farmers and practice innovate methods and technologies to increase the farm produce. Moreover, various pilot insurance programmes are introduced by the insurers to support for sector development and make up for the potential consumer loss. These reasons are attributed to the high demand for crop insurance among the farmers in the countries of Asia- Pacific region.

Competitive Landscape

The crop insurance market includes several market players such as ADM, Sompo Holdings Inc, AXA XL, Chubb Limited, HDFC Ergo, Munich Re Group, Odyssey Group, QBE Insurance Group Limited, Tokio Marine Holdings, Inc, and Zurich Insurance Group. These market players are adopting expansion of business across various regions to maintain their dominance in the global renewable energy market.

For instance, in October 2022, HDFC ERGO launched a technology backed farm yield insurance policy for farmers. This is a first-of-its-kind insurance solution, where a satellite-based index is used to provide localized farm level coverage. The product is targeted at farmers under corporate/farm input company (FIC) contracts and is valid for food, oilseed, commercial or horticulture crops.

In addition, in June 2022, Munich Re Group partnered with Cloud to Street (C2S) and Raincoat to provide the first country-level flood parametric program with local payouts in Colombia. Under the new program insured farmers will receive loan relief based on the magnitude of floods that hinder their abilities to grow crops or market them.

Moreover, in September 2021, Sompo International Holdings Ltd., a wholly-owned subsidiary of Sompo Holdings acquired ARA 1857 S.p.A, an Italian crop insurance company. The acquisition of ARA is another strategic and welcome step in strengthening the company’s presence with new products and capabilities in a key agriculture market.

KEY MARKET SEGMENTS

Type (Crop Yield Insurance, and Crop Revenue Insurance) by Application (Multi-peril Crop Insurance (MPCI), Crop-hail Insurance, Livestock Insurance, and Others), by Distribution Channel (Banks, Insurance Companies, Brokers/Agents and Others

By Type

• Crop Yield Insurance

• Crop Revenue Insurance

By Application

• Multi-peril Crop Insurance (MPCI)

• Crop-hail Insurance

• Livestock Insurance

• Others

By Distribution Channel

• Banks

• Insurance Companies

• Brokers/Agents 

• Others

By Region

• North America

  • U.S

  • Canada

  • Mexico

• Europe

  • Germany

  • UK

  • France

  • Spain

  • Italy

  • Netherlands

  • Denmark

  • Finland

  • Norway

  • Sweden

  • Russia

  • Rest of Europe

• Asia-Pacific

  • China

  • Japan

  • India

  • Australia

  • South Korea

  • Thailand

  • Singapore

  • Rest of Asia-Pacific 

• RoW

  • Latin America

  • Middle East

  • Africa

REPORT SCOPE AND SEGMENTATION: