Webinar Report : Crop Insurance: Data Analytics, GIS and Product Design
12 November 2020 - The Making Finance Work for Africa (MFW4A) Secretariat, GIZ and Agritask hosted the webinar entitled "Crop Insurance: Data Analytics, GIS and Product Design".
There is a fundamental problem with design of agriculture insurance products due to the lack of adequate data and means to capture and utilize existing datasets efficiently. This results in a significant gap between the calculated pay-outs and the actual losses suffered by farmers (basis risk), which leads to low product acceptance and poor client retention.
Agriculture (re)insurers, calculating agents and creditors need to evaluate risks from complex, multidisciplinary datasets which include geographical, agronomical, credit repayment and climate-related risks among others. They require tools to make use of existing data and also continuously improve their products offering whilst keeping their operations efficient and reliable.
Since its introduction two decades ago, parametric insurance in agriculture still has not reached its optimal potential as evident in the slow/ minimal adoption around the world. Climate change has exacerbated the challenges with the risks affecting the agriculture sector becoming more rampant hence not only increasing underwriting losses but also impacting livelihoods of both large and smallholder farmers.
Precision agriculture technologies are relevant to smallholder farmers, finance sector and insurance companies that underwrite risks as it increases farmers crop yields, reduces costs of production through optimizing inputs use and enables both agri-finance and insurance sectors to provide tailor-made products. Livelihoods of smallholder farmers are dependent on these in order to access credit, increase their income while insurance provide products to mitigate any uncontrollable risks that emerge.
Rom Aviv, Managing Director, Head of Agricultural Insurance, Agritask remarked that "The main reason Agritask was founded is because of the growing demand for technological advancement in agricultural operations."
Agritask offers the possibility of using satellite images to calculate vegetation index (NDVI) to control the crop growth, among other indices. Based on these different datasets, the platform can classify and evaluate performance on different sections inside one same plot according to crop growth. It enables users to calculate the actual planted area in a field and achieve an accurate and near real-time risk assessment.
"The usage of high-resolution images has grown over the past few years in the agriculture sector. Its more advanced use for insurance & agriculture related analysis for product development/ improvement, risk monitoring and claims management is also increasing, “said Einav Gold, Head of Insurance Products & Operations, Agritask.
Besides introducing participants to precision agriculture technologies that are relevant to smallholder crop insurance, the webinar also highlighted risk mitigation measures, value-addition services to farmers and its contribution within the crop insurance context. Some use case examples from relevant projects globally that illustrate use of technologies in design/ distribution crop insurance products and supporting insurance schemes were also shared. These included:
- Defining plot boundaries remotely using real-time based mobile applications & software, which helps to improve the efficiency in data collection from clients.
- Enhancement of farmer profiling and aggregation based on homogeneous risk parameters, relying on the NDVI based area yield index (AYI) monitoring to risk exposures within same clusters.
- Use of satellite images, remote sensing, and uniformity analysis to digitalize the process for field inspections to reduce fraud and moral hazard. The models can be also used to define the inspection plan in each one of the plots from the identified farmers.
- Satellite technology, remote sensing and general analytics could help improve yield estimations with advanced analysis and high-resolution satellite images. This solution could help in loss adjustments, reduce moral hazards associated with ground reporting and significantly reduce costs associated with crop cutting.
- Products and enhanced platforms will lead to better growth, shrinking the protection gap hence increasing farmer resilience and product offering.
For more details on this session’s content, the event recording is available below. The webinar presentation can also be downloaded via this link.
Agritask is a holistic ag-operations platform, designed to enable fact-based decision making for agricultural businesses. To fulfill this vision, Agritask integrates a wide array of agronomic technologies, tools and data sources into one brain that analyzes the data, quantifies the risks and produces alerts, recommendations, and actionable insights. Data sources vary from sensors and machinery, aerial images, forecast data, and more.
The platform is extensive and rich in capabilities, yet built in a modular, flexible way. It grows with customer needs and facilitates more advanced use of ag-tech, making them accessible via a single platform.
Agritask is used in more than 30 countries, by agricultural businesses of all types: large-scale growers, multi-farm corporations, private equities, ag-buyers, food conglomerates, ag-financing and insurance companies, as well as governments and NGOs.