Public sector and non-profit institutions – Integrated approach with intelligent solutions

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SystemAgro - Munich Re

Public sector and non-profit institutions – Integrated approach with intelligent solutions

It is not only the pan-national institutions of G7, G20 and the derived “InsuResilience” initiative that give momentum to implementing agriculture risk transfer solutions designed to mitigate climate risks. Initiatives of the World Bank and other multilateral institutions as well as NGOs and the donor community are increasingly engaging in agriculture insurance and demanding sustainable solutions. Public-private partnerships (PPP) in agricultural insurance systems follow the mechanisms described in SystemAgro in order to get a sustainable agriculture insurance system in place.

Today, farmers are finding it more and more difficult to rely on their stable crop yields. In this situation, it is vital that farmers receive support from their governments and insurers to allow  them to take considerable risks when investing in their future.

To meet the long-term demand for food, we see public-private partnerships (PPP) as a strong basis for an intelligent nationwide solution, in which farmers, government and the insurance industry work together.

This is the basis of SystemAgro. Thanks to its customised structure for each country, SystemAgro stabilises the agricultural sector in the long term. It secures farmers’ livelihoods, regardless of the exposure they face or the type of agricultural production involved. SystemAgro is a PPP concept for an experience-based set of risk sharing mechanisms that focus on sustainability. For this, premium co-financing is one essential feature, as seen in all large agriculture insurance systems. With this public money going into the PPP, the government is responsible for defining risks on the basis of actuarially sound rules for all agriculture insurance products. As both frequent and rare catastrophe events are covered via the PPP, risk-adequate rates have to include both scenarios. The concept of SystemAgro requires the establishment of a central unit accountable for the PPP’s financial and organisational set-up. There are quite a few successful PPP models worldwide, either in the form of an insurance pool or a (semi) public special insurer.

Munich Re brings farmers, government and specialist insurers together and uses SystemAgro to develop the best-possible sustainable solution, which draws on our wide-ranging abilities and global business partnerships. In our pursuit to find the best solution, we combine high-tech data components derived from precision farming or remote sensing and use state-of-the art technology.

Rely on the know-how and experience of our agriculture insurance experts in various regions of the world.

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