Global Crop Insurance Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2024-2032)

Global Crop Insurance Market Overview

The increasing risk intensiveness of agriculture owing to reduced arable land, climate change, and high labour costs is hindering the growth of the agricultural sector, which is one of the most significant industries in countries such as the United States and India. Therefore, various governments are introducing favourable initiatives to support the agricultural sector, which is aiding the market growth. The promotion of the economic stability of agriculture through crop insurance to raise awareness of farmers to aid them in establishing insurance is propelling the growth of the crop insurance industry.

Drones are increasingly used by crop insurers to collect data regarding damaged crops to mitigate the losses of farmers. Drone mapping software can be used to process and visualise the data to analyse crop loss effectively. This is increasing the adoption of drones in crop insurance, which is projected to fuel the market growth. In addition, drones can be employed for soil and field analysis, irrigation, and crop monitoring. Moreover, the rising use of analysis software to quantify results and indicate the damages to make the process of crop insurance faster, more accurate, and more efficient is providing further impetus to the crop insurance market development.

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Global Crop Insurance Market Trends

Rising Focus on Sustainability

The growing focus on sustainability is boosting the crop insurance market revenue. Insurers are increasingly offering premium discounts or reduced deductibles for farmers adopting sustainable practices such as crop rotation, pesticide use, and water conservation methods. They are also integrating environmental risk factors and the impact of sustainable practices on crop yields into their assessments. With growing concerns regarding climate change such as droughts, floods, and storms, key players are also incorporating climate change risks into their models to better predict and manage risks. Besides, index-based crop insurance using environmental data is increasingly gaining popularity among insurers and farmers to manage risks associated with changing environmental conditions more effectively.

Global Crop Insurance Market Outlook

Technological Advancements and Product Innovations

Technological advancements and product innovations are shaping the crop insurance market trends and dynamics. Insurance providers are leveraging technologies like big data, artificial intelligence, satellite imagery, and drones to monitor risks, assess crop health, and improve claims processing. In July 2023, Agi3 Risk Services Ltd. (ARS) announced the launch of AgriEnhance™, an exclusive AI-powered crop insurance solution aimed at improving the way farmers protect their crops. Surging investments in precision agriculture are providing insurers with more detailed and accurate information regarding production and planning activities, improving agricultural risk management. In September 2020, the Indian government announced its plans to develop INR 600 crores in smart and precision farming. Moreover, insurers are exploring the use of blockchain technology to reduce fraud and improve productivity in claim processing while providing farmers and insurers with a more transparent and secure process.

Market News

October 2024

Digital Agriculture Services launched a crop insurance solution in Australia that employs automapping, machine learning, and geospatial data to improve policy accuracy for underwriters, insurers, loss adjusters, and brokers.

November 2024

Lockton Re announced a strategic collaboration with Verisk to develop new (re)insurance products. Under the collaboration, Lockton Re uses Verisk’s agricultural risk modelling solutions to understand the impact of meteorological factors and climate change on crop protection.

Global Crop Insurance Market Growth

The rising focus on sustainability is boosting the crop insurance market, as insurers offer discounts or reduced deductibles for farmers adopting sustainable practices like crop rotation, water conservation, and pesticide management. They are also incorporating environmental and climate change risks into their models to better predict crop yields. Index-based crop insurance, which uses environmental data, is gaining popularity to manage risks related to climate change. Technological advancements, such as big data, AI, satellite imagery, and drones, are enhancing risk monitoring and claims processing. Innovations like AgriEnhance™, a new AI-powered crop insurance solution, and blockchain technology are also improving transparency, reducing fraud, and offering more accurate, efficient coverage for farmers.

Global Crop Insurance Market Restraints

Farmers, especially in emerging economies, lack awareness regarding the benefits offered by crop insurance solutions. In various countries, prices of crop insurance solutions can be high, especially where governments do not offer sufficient subsidies or support, deterring small-scale and low-income farmers from purchasing them. The increasing prevalence of unpredictable climate events such as floods, storms, and droughts can make it difficult for insurers to accurately assess risk, hence impacting the productivity of crop insurance companies. Underdeveloped technological infrastructure for claim processing and risk modelling is further expected to limit the growth of the crop insurance industry.

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Global Crop Insurance Industry Segmentation

The EMR's report titled "Global Crop Insurance Market Report and Forecast 2024-2032" offers a detailed analysis of the market based on the following segments:

Market Breakup by Coverage

• Multiple Peril Crop Insurance (MPCI)
• Crop-hail Insurance

Market Breakup by Distribution Channel

• Banks
• Insurance Companies
• Brokers/Agents
• Others

Market Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa 

Global Crop Insurance Market Share

By Coverage Insights

As per the crop insurance market analysis, multiple peril crop insurance (MPCI) provides comprehensive protection against various natural risks, including pests, disease, weather events, and other perils that might threaten crop yield. Meanwhile, crop-hail insurance offers crop protection against damage caused by hail. It can also provide additional coverage for additional perils like vandalism, fire, and theft.

By Distribution Channel Insights

Banks partner with insurance companies to sell crop insurance products as a part of a bundle with other products such as credit and loan products. As banks have a strong foothold in rural areas and are trusted by farmers, the demand for crop insurance solutions from banks is increasing. The introduction of government initiatives that require banks to facilitate crop insurance policies further fuels the crop insurance market development. In June 2024, HDFC ERGO General Insurance was authorised by the Government of Maharashtra to implement the Pradhan Mantri Fasal Bima Yojana (PMFBY) for the Kharif 2024 season.

Meanwhile, insurance companies directly distribute crop insurance solutions through their networks of brokers, agents, and digital platforms, offering insurers better control over customer interactions, product offerings, and claims processes. Such companies are also integrating satellite imagery, big data, and AI to better manage claims, assess risk, and improve customer experience.

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Global Crop Insurance Market Regional Insights

North America Crop Insurance Market Trends

In the United States, crop insurance protects over USD 200 billion worth of crops and livestock. In 2022, around 13% of farms in the country participated in Federal crop insurance programmes, with midsize and large-scale family farm operators receiving 80% of payments. In the same year, the country witnessed 18 separate weather and climate disasters, costing nearly USD 1 billion. As per the American Farm Bureau Federation, total crop and rangeland losses from major disasters were more than USD 21.4 billion in the United States. Moreover, as of November 2024, the USDA issued over USD 6 billion in crop insurance indemnities for the 2024 crop year.

According to Statistics Canada, crop insurance gross payments surged from USD 3.8 billion in 2021 to USD 4.897 billion in 2022, which can be attributed to the severe drought across Western Canada in 2021. Hence, the increasing prevalence of extreme weather conditions caused by rapid climate change is providing lucrative North America crop insurance market opportunities. In March 2024, the governments of Saskatchewan and Canada announced details of the 2024 Crop Insurance Program, providing insured intercrops and additional feed crops.

Asia Pacific Crop Insurance Market Dynamics

The agricultural sector in India provides livelihood support to nearly 42.3% of the global population, accounting for an 18.2% share of the country's GDP. The Indian government has introduced initiatives such as Pradhan Mantri Fasal Bima Yojana (PMFBY) to provide farmers safety against crop losses caused by diseases, pests, or natural calamities. Increasing impacts of rapid climate change such as droughts, floods, and earthquakes, among others, are surging the requirement for crop insurance solutions. For instance, flash floods in Bangladesh in May 2022 led to crop loss worth USD 6 million while impacting the livelihoods of 24,000 farmers.

In South Korea, the number of farming households covered by agriculture insurance surged to nearly 550,000 due to the introduction of the Korean government’s agricultural and fishery disaster insurance scheme that covers up to 90% of the insurance premium. Besides, countries such as Vietnam and Pakistan are the most vulnerable to climate change. In September 2024, Typhoon Yagi led to damage of over 50,000 hectares of vegetable crops, 200,000 hectares of rice, and 60,000 hectares of fruit trees. The agricultural sector forms the cornerstone of the Indonesian economy, with approximately 28.79% of the Indonesian workforce engaged in agriculture. This emphasises the need for the development of innovative agriculture insurance solutions.

Competitive Landscape

Key crop insurance market players are increasingly leveraging machine learning (ML) and artificial intelligence (AI) to improve risk assessments, predict crop yields, and optimise underwriting processes. They are also providing incentives for farmers who adopt sustainable practices such as conservation tillage, crop rotation, and reduced pesticide use.

Key Industry Players

Great American Insurance Company

Great American Insurance Company, founded in 1872, is a prominent provider of insurance services across a wide range of sectors such as transportation, construction, and agriculture. Its key business areas include crop insurance, property and casualty insurance, and speciality insurance.

Agriculture Insurance Company of India Limited

Agriculture Insurance Company of India Limited, founded in 2002 by the Indian government, is a company that offers agriculture-related insurance solutions, protecting farmers’ livelihoods during crop diseases, natural calamities, and other agricultural uncertainties. Some of its solutions and schemes include the Pradhan Mantri Fasal Bima Yojana (PMFBY), the Weather-Based Crop Insurance Scheme (WBCIS), and the National Agricultural Insurance Scheme (NAIS).

ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited, founded in 2001, is a leading private sector general insurance company headquartered in Mumbai, India. Its key business areas include home insurance, crop insurance, motor insurance, home insurance, travel insurance, and corporate and business insurance.

Other major players in the crop insurance market are The Philippine Crop Insurance Corporation, and Sompo International Holdings Ltd., among others.

Recent Developments

February 2024

The Indian government launched the ‘Sarathi’ portal aimed at providing a comprehensive suite of insurance products, including PMFBY, tailored for farmers and the rural population of India. The government also launched the Krishi Rakshak portal and helpline number to enable farmers to easily lodge their grievances under the PMFBY.

September 2023

The Insurance Development Forum (IDF), the German Government, the United Nations Development Programme (UNDP), and the Uzbekistan government launched a EUR 1.9 million project to develop and implement a sovereign risk transfer scheme consisting of multi-peril indemnity insurance product to protect climate-vulnerable farmers in Uzbekistan. The insurance solution, developed under the Tripartite Agreement, aims to benefit 16,910 farmers by granting smallholder farmers access to insurance and as such increases their resilience to climate change.