Crop Insurance Market to Grow with a CAGR of 5.33% Globally through 2028
Development of new products and services and increasing international
trade of agricultural products are factors driving the global crop insurance
market in the forecast period 2024-2028.
According to TechSci Research report, “Global Crop Insurance
Market - Industry Size, Share, Trends, Competition Forecast &
Opportunities, 2028”, the Global Crop Insurance Market stood at USD 39.32
billion in 2022 and is anticipated to grow with a CAGR of 5.33% in the forecast
period, 2024-2028. Global crop insurance is a risk management mechanism that
safeguards farmers against losses caused by unpredictable factors like extreme
weather, pests, and market volatility. It helps stabilize agricultural income,
supports food security, and encourages technological advancement. Key
challenges include affordability, data quality, moral hazard, and evolving
risks. Emerging trends involve data analytics, parametric insurance, innovative
product design, and public-private partnerships. Notably, Asia Pacific
dominates the global crop insurance landscape due to its substantial
agricultural output and susceptibility to climate change-related challenges.
Overall, global crop insurance plays a crucial role in bolstering agricultural
resilience in the face of a changing climate and growing uncertainties.
Crop insurance is of paramount importance in modern
agriculture. It offers farmers a safety net, mitigating the financial risks
associated with crop failure and yield fluctuations. This protection is
particularly crucial for smallholder farmers and those in developing countries
who often lack the resources to absorb significant losses. By providing a
financial cushion, crop insurance promotes investment in technology, modern
farming practices, and sustainable agriculture. It also helps stabilize
farmers' incomes, ensuring their ability to meet their financial obligations
and continue farming even in the face of adversity.
Food security is another critical dimension of global
crop insurance. As the global population continues to grow, the demand for food
production increases. Crop insurance contributes to food security by reducing
the likelihood of food shortages due to crop failures. When farmers have
insurance coverage, they are more likely to recover from losses and maintain
consistent agricultural production. This, in turn, helps ensure a steady food
supply for both local and global populations.
Advancements in data analytics and remote sensing
technology have improved risk assessment and coverage customization.
High-resolution satellite imagery, weather data, and soil information enable
insurers to assess risks more accurately and efficiently. This enhances the
precision of risk assessment and reduces the likelihood of moral hazard and
adverse selection. Additionally, blockchain and smart contracts are being
integrated to streamline claims processing.
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One of the primary challenges is making crop insurance
affordable and accessible to all farmers, especially those in developing
countries. Insurance premiums can be prohibitively expensive for smallholders,
limiting their ability to purchase coverage. Governments often step in to
subsidize premiums and make insurance more accessible, but the financial burden
remains a concern. Furthermore, in remote and underserved areas, the lack of
insurance infrastructure can hinder access to coverage.
The global Crop Insurance market is segmented into coverage,
provider, regional distribution, and company.
Based on provider, the market is segmented into banks,
insurance companies, brokers/agents, and others.
Banks have emerged as a rapidly growing segment in the
global crop insurance market. They play a pivotal role by providing financial
services, including loans and credit facilities, to farmers, often with crop
insurance as a bundled offering. This integrated approach not only promotes
access to insurance but also ensures that farmers have the financial means to
invest in their agricultural practices. Banks recognize that crop insurance
reduces their credit risk, making it an attractive component of their agricultural
lending portfolios. This trend signifies the increasing recognition of crop
insurance as a valuable tool in modern agriculture and its essential role in
supporting farmers' financial security.
Major companies operating in Global Crop
Insurance Market are:
- Agriculture Insurance Company of India
Limited
- Chubb Limited
- Santam (Sanlam)
- Tokio Marine HCC
- QBE Insurance Group
- Zurich American Insurance Company
- Sompo International Holdings Ltd (Sompo
Holdings Inc.)
- Great American Insurance Company
(American Financial Group Inc.)
- Philippine Crop Insurance Corporation
- Axa S.A.
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“Global crop insurance is a vital risk management tool
for farmers worldwide. It provides financial protection against various perils,
including extreme weather events, pests, diseases, and market fluctuations.
Crop insurance helps stabilize farmers' incomes, encourages agricultural
modernization, and contributes to food security. Key drivers include climate
change, technological advancements, government support, and globalization.
However, challenges such as affordability, data quality, moral hazard, and evolving
risks pose obstacles. Notable trends include data analytics, parametric
insurance, innovative product design, and public-private partnerships. In
particular, Asia Pacific is a dominant region for crop insurance due to its
significant agricultural production and climate vulnerability,” said Mr. Karan
Chechi, Research Director with TechSci Research, a research-based management
consulting firm.
“Crop
Insurance Market – Global Industry Size, Share, Trends, Opportunity, and
Forecast, Segmented By Coverage (Multi-peril Crop Insurance (MPCI), Crop-hail Insurance), By Provider (Banks,
Insurance Companies, Brokers/Agents, and Other), By Region, Competition”,
has evaluated the future growth potential of global Crop Insurance market and
provides statistics & information on market size, structure and future
market growth. The report intends to provide cutting-edge market intelligence
and help decision makers take sound investment decisions. Besides, the report
also identifies and analyzes the emerging trends along with essential drivers,
challenges, and opportunities in the global Crop Insurance market.
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