PUBLISHER: Allied Market Research | PRODUCT CODE: 1414816
PUBLISHER: Allied Market Research | PRODUCT CODE: 1414816
According to a new report published by Allied Market Research, titled, "Agricultural Insurance Market," The agricultural insurance market was valued at $38.5 billion in 2022, and is estimated to reach $67.4 billion by 2032, growing at a CAGR of 5.8% from 2023 to 2032.
Crop insurance provides cultivators with financial protection against expected crop losses caused by uncontrollable natural factors like fire, weather, floods, pests, and diseases. The insurance coverage can be based on the total expenditure, a multiple of it, or a proportion of the expected crop income for which premiums are paid. An indemnity that is claimable payment is provided based on the difference between the guaranteed yield (threshold yield) and the actual yield. Claims are paid after the actual loss in crop yield is determined. With agricultural insurance services, the insured party (the farmer) pays a premium to an insurer to guarantee against losses (of crops, assets, property, livestock, or income) over a certain time period.
The agricultural insurance market is witnessing significant growth, driven by increased government support aimed at safeguarding farmers against income, price, and yield volatility. In countries like the China and India, where agriculture plays a pivotal role in the economy, the sector faces rising challenges due to factors like climate change and rising prices of farming equipment and pesticides. These complex agricultural risks affect the sector as a whole. Governments of various countries have responded proactively by implementing supportive policies for the agricultural sector, thereby boosting the expansion of related markets, including agricultural insurance. Unfavorable environmental circumstances frequently result in noncommunicable diseases due to low or high temperatures or excess or lack of moisture. Diseases are frequently triggered by toxic pollutants in the air because of the existence of neighboring chemical or metallurgical industries. Plant diseases can be caused by a variety of agents, such as
1) bacteria, viruses, fungi, nematodes, and parasitic plants. This creates a huge demand for crop insurance by the farmers in order to safeguard their produce from various frequently occurring diseases and prevent heavy losses.
The global agricultural insurance market is hampered by a lack of standardized processes and a lack of understanding of the concept of agricultural insurance. Extreme weather events such as
1) drought are expected to become more common as a result of climate change. Constantly changing global market conditions and fluctuating domestic developing conditions offer severe dangers that farmers need to constantly handle. Factors such as
1) a lack of understanding about the market, plans, claim benefits, and growing insurance prices could hamper the growth of the global agricultural insurance market.
Blockchain technology is showing promise as a means of reducing costs. Insurance costs will be reduced, claim settlements will be expedited, fraud control will be improved, and transparency and confidence will be increased. Changes in transportation or prices, for example, can be viewed in real time by all stakeholders, addressing information asymmetries in agricultural supply chains. Over time, this might lead to increased trust, better-designed insurance solutions, and lower premiums. The software generates sustainable land management plans for smallholders based on an analysis of storage temperature, rainfall, ground moisture, air humidity, and soil type data. Smallholders who participate in these methods are immediately covered and get an insurance payout in the event of crop failure, ensuring a guaranteed minimum income.
The COVID-19 pandemic has had a substantial impact on the agricultural insurance market., Lockdowns, supply chain disruptions, and labor shortages hindered normal farming operations, leading to financial losses for numerous farmers. This highlighted the importance of comprehensive risk management, including farm insurance, in times of uncertainty. The pandemic highlighted the sector's vulnerability to unforeseen disasters, prompting increased awareness of the necessity for comprehensive insurance coverage. Farmers sought strategies to safeguard their livelihoods not only from traditional risks like weather-related losses but also from unique challenges posed by global health crises.
Some of the leading agricultural insurance market players are Great American Insurance Company Agriculture Insurance Company of India Limited (AIC), Allianz SE Reinsurance, Munich Re Group, Chubb, Sompo International Holdings Ltd, Zurich, AXA, People's Insurance Company (Group) of China Limited, and QBE Insurance Ltd. The market players are continuously striving to achieve a dominant position in this competitive market using strategies such as
1) collaborations and acquisitions.
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