Parametric policy offered for German crop losses
Reprints
Pembroke, Bermuda-based specialty insurer and reinsurer Sompo International Holdings Ltd. and Stuttgart, Germany-based insurer SV SparkassenVersicherung on Wednesday launched a parametric insurance product to protect German farmers exposed to crop losses due to extreme weather.
An index-based product, SV ErnteIndex pays out based on a 10-year average crop yield index for the district where the farm is located, as well as yield and market price projections the farmer chooses at the time the cover is purchased, the companies said in a joint statement.
The parametric cover is designed to complement traditional loss-based crop insurance and protects German farmers against crop losses arising from drought, heavy frost or prolonged wet weather, the statement said.
Typically, the coverage lasts for one year and can be used for a wide range of conventional and organic crops, the statement said.
The parametric cover provides significant unlimited capacity, a Sompo International spokeswoman said.
Sompo International offers a similar parametric crop cover to farmers around the world, the spokeswoman said.
“This product offers German farmers a simple but effective insurance cover to protect their crops. In catastrophic years such as 2018 when severe drought devastated crop yields, farmers will realize the true value of multi-peril crop insurance,” said Kris Lynn, senior vice president of global agriculture for Sompo International, in the statement.
Read Next
-
Drought causes $550 million in agricultural losses: Official
Miroslav Toman, the Czech Republic's agriculture minister, said that drought has caused up to $553 million in agricultural losses so far this year, Xinhua reported citing media sources. Mr. Toman said that food prices have increased in the country following the drought.
