The effects of COVID-19 were investigated on the global agricultural insurance industry by AgroInsurance International in a recent publication. A survey was conducted from July 2020-February 2021 amongst agricultural insurers and reinsurers to examine their experiences of any difficulties during the COVID-19 outbreak in 2020.

Participants included 64 respondents from 29 countries representing brokers (5%), primary insurance (62%) and reinsurance (11%) companies, loss adjustment (3%) and underwriting (5%) agencies, and other service providers for the agriculture re/insurance business (14%).

According to the survey results, COVID-19 did not have a significant effect on the business operations of the agricultural insurance market overall. Only 16% of respondents stated that in 2020 their companies experienced some decrease in premium volumes and a reduction in the number of clients. The farmers in most countries did not change their strategies due to the pandemic and continued using insurance as a risk management instrument. Reinsurers faced difficulties in conducting on-site meetings with their clients. Nonetheless, renewals and new treaties were being concluded on time, whilst agricultural reinsurance programs suffered minimal impact. The operational regimes of the insurance businesses worldwide were affected the most common challenges indicated by 71% of respondents being the inability to conduct face-to-face client meetings. Insurance companies managed to make quick modifications to their strategies to communicate with farmers remotely.

32% of respondents had to make some changes to their underwriting practices in 2020. Some insurers implemented mobile applications, to enable farmers to purchase insurance coverage online and some started to use digital signatures more extensively. Policy sales closing and application dates were revised, premium payments and reporting deadlines were extended by most of the insurance program administrators. pre-acceptance and routine crop surveys were performed using new social/physical distancing protocols. Some insurers employed drones for remote crop surveying and a number of insurers contracted satellite data providers to assist them with crop inspections and crop condition assessments.

Loss assessment was moderately affected as 45% of the survey participants responded that some changes to the procedures and protocols were implemented. In order to perform loss assessment, some companies used the photo-based approach, where clients took photos showing the volume and characteristics of the loss gained and sent it further to the insurance company. Drones and satellite imagery were also used.

Additionally, according to the survey responses, the most challenging client relations were small/individual farmers (68%). In general, the most common challenge experienced by the majority of respondents was the planning of on-site visits. It has also been noted that due to local lockdowns and restrictions, some farmers missed an opportunity to update their yield records.

Technologies applied for underwriting and loss assessment during the 2020 pandemic mostly included satellite remote sensing (68%) and weather data sets (68%), followed by digital maps (55%) and GIS software (53%). Some companies accepted and applied photos and videos provided by the insurers during loss assessment (37%), as well as drones (29%). Weather data from automatic weather stations (29%), data from combined yield monitors (29%) and soil moisture data from field sensors (16%) were additionally applied. The insurers estimated that the most necessary technology to be implemented in future to enhance agricultural insurance programs is satellite remote sensing (76%).

Overall, there is strong evidence of a paradigm shift in many countries, with primary insurers focusing on new technologies and implementing changes to key procedures and protocols. However, in many cases, those processes had been long due. The pandemic became an influencing factor, which encouraged insurance companies to focus on new technologies and solutions.