While Index-based insurance is widely acknowledged as a fundamental need in securing risk for under-protected segments of agriculture, the availability of such policies has been extremely limited. That is about to change.
We are thrilled to be at the forefront, working with Skyline Partners, to bring an index-based insurance platform to market. This data-driven parametric insurance service combines our remote sensing data analytics with Skyline’s proven insurance capabilities.
As noted in the article How Agricultural Index Insurance Can Promote Risk Management and Resilience in Developing Countries by MRR at UC Davis, “Agricultural index insurance overcomes two key problems with conventional insurance besides high cost: adverse selection and moral hazard. One example of adverse selection in agriculture is when farmers who are more likely to suffer losses are the only ones who buy insurance. An example of a moral hazard would be if covered farmers cut back on effort or compromise yields for the specific purpose of receiving an insurance payment. Index insurance overcomes both adverse selection and moral hazard because the index is based on factors that cannot be influenced by any one person.”
While efforts have been made to bring index-based solutions to the market, take-up has been disappointingly low. By working with Skyline, we aim to change that with a unique offer for the market. The platform is built to help design and distribute the products – including making quotes for farmers. Additionally, it will include reinsurance with superior-rated securities. And most importantly, we are ensuring the support of the insurance with local regulators.
“Working with Geosys to bring this new offer to market was a key component to its success,” note Gethin Jones and Laurent Sabatié, Skyline Partners Co-Founders. “Their ability to deliver high-quality data analytics on a global scale empowers the indices. Plus, their clear commitment to ongoing innovation gives us the opportunity to grow together.”
“Finding a partner to work with on index-based insurance solutions has been a priority for our business,” says Matthieu Hyrien, VP of business development and marketing at Geosys. “We knew we had the data analytics to empower a quality offer and Skyline is clearly a leader in this space. Skyline is entirely digital, fully automated and data-driven. They understand the complexities of an index-based offer and have solutions to bring it to market.”
Bringing an index-based solution to the market is a great opportunity to help build a more secure farming future for some of the most at-risk regions of the world. This is key factor in building a sustainable agricultural system globally – something we are proud to be a part of.
Looking to bring index-based solutions to your customers? Contact us today