For Munich-based Allianz Global Reinsurance, crop insurance—previously, a rarity—is becoming a growth sector. The company is using breakthrough radar technology to monitor and predict agricultural yields, at a time when climate change is causing severe crop failures and food shortages worldwide.
"Securing and increasing food production will be one of the main political and social issues facing us in the near future", emphasized Allianz Re CEO Clemens von Weichs. "As with many economic issues, insurance can act as a guarantor for stability and continuity in this area, too."
In this context, Allianz Re's Agricultural Reinsurance team in Zurich is developing a new crop insurance approach in cooperation with Sarmap, an “Earth observation gateway,” based in Purasca, Switzerland. Sarmap uses Synthetic Aperture Radar -based remote sensing software to monitor and measure the potential yield of agricultural areas.
Compared to remote sensing technology that is based on purely optical sensors, the radar technology can convert satellite images into data of considerable value, irrespective of weather conditions and the time of day. This technology will be available exclusively to Allianz Re.
"We can quite literally watch the grass grow", said Allianz Re Head of Agriculture Thomas Heintz, describing how the tool works. "In 2013, when the European Space Agency (ESA) starts to make satellite images available on the Internet on a weekly basis and free-of-charge, we will have this technology at our fingertips. “
He predicts multiple uses for the SAR data.”We can estimate a field's current potential yield and monitor how it develops during the vegetation period —a fundamental prerequisite for multi-peril crop insurance." In the event of a loss, the software can be used to determine in detail the cause and impact of the damage.”
To date, crop insurance has been challenging and expensive to offer. “This closes data gaps that have made agricultural insurance difficult, even impossible, in the past,” commented Heintz.” "Damage caused by natural catastrophes, for example, is [hard] to measure, if [we cannot] determine what a field's potential yield was immediately prior to the event. In developing countries, this is even more difficult than in developed markets.”
What’s more, the geographical diversification of agricultural production had previously resulted in high business management and administrative costs. “With the help of the Sarmap software, [we can offer}… a truly groundbreaking new development in this sector", emphasized Heintz. "This technology means that we can help the primary insurers to overcome market entry barriers and offer agricultural insurance at competitive prices.”
For more information, visit the Allianz Global Reinsurance website.
Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.Edited by
Rich Steeves
