SystemAgro – Covering risks in agriculture
Munich Re’s crop insurance system is a success the world over: SystemAgro helps farmers protect themselves from the consequences of climate change. Special public-private partnerships facilitate close cooperation between farmers, the state and agricultural insurers.
Climate change is causing natural disasters to occur at ever shorter intervals. This is a major threat, especially for agriculture. The shift in growing seasons has led to more frequent frost; hail, drought and floods destroy entire harvests. Such damage often affects large regions and adds up to massive losses.
Increase in food production by up to 70%
At the same time, the world is undergoing a transformation. In the coming decades, the world’s population will grow dramatically, and there will be a change in dietary habits and lifestyles as a result of growing affluence and the rising demand for bioenergy. Developments such as these will cause skyrocketing demand for agricultural raw materials. The UN's Food and Agriculture Organization (FAO) is even talking about the necessity of increasing worldwide food production by 70% in order to feed the world's burgeoning population – a challenging task in view of the risks of climate change and the continuing exodus from rural areas to cities.
Safe investments and shared risk
In order to continue to meet the rising demand for food in the future, it will be necessary to invest in seed, fertiliser and technology. This is possible only if the risks are covered. Comprehensive crop insurance cover guarantees continued production in the next season, even after a poor harvest. Experience shows that the private sector alone is unable to bear the burden of effective crop insurance, making it imperative to form public-private partnerships involving multiple parties.
SystemAgro – An understandable insurance system for all
Munich Re combined its experience with all of the world's crop insurance systems over the past 30 years to create SystemAgro. This system is currently being used to insure over 200 million hectares of farmland. It consists of four parts, each of which is essential for a successful, sustainable crop insurance system: the provision of support to farmers to finance premiums, state participation in insured losses, the availability of insurance for all farmers, and central structures ensuring uniform conditions.
SystemAgro is based on a » public-private partnership and is integrated with the relevant laws in the national agricultural policy. SystemAgro reliably minimises the insureds' specific exposure to natural hazards. By concluding multi-peril crop insurance under SystemAgro, farmers boost their credit standing and are enabled to make plans and secure financial protection. SystemAgro from Munich Re is thus a reliable response to the pressing challenges posed by climate change, population growth and the globalisation of agricultural markets.
