The global agriculture insurance market size is estimated to be over USD 30 billion by 2022. The rising demand for crops for direct human consumption as well as industrial processes has led to a growth in automation and other modern practices in agriculture.
Rising incidents of natural calamities across the world has resulted in an increasing number of farmers opting for agriculture insurance to protect their crops, equipment, and livestock. Special emphasis has been witnessed on promoting crop insurance in some of the leading agriculture-oriented countries including India and China.
Agriculture contributed to approximately one-third of the global GDP in 2017. Apart from boosting the economic growth, development in the agriculture sector is also equally important for the growth of the poor population across the globe. According to the World Bank, agriculture is the source of income for 65% of the world’s poor working population. Thus, significant investment in the agriculture sector has become equally important for developing nations, especially for agro-based economies.
The risk involved in agriculture is quite high as the yield is mainly dependent upon the weather. Crop failure due to seasonal variations can severely impact the farmers, as well as the other segments present in the agriculture value chain. Price volatility is another important factor which creates an uncertain environment. Variations in the commodity prices or input prices may impact the profit margin or even cause loss to the agriculture sector. Owing to these factors, investments are being made increasingly in the agriculture insurance sector with high support by the governing as well as international bodies.
Agricultural insurance began mainly for the livestock insurance for protection against the risk of livestock mortality. Insurance against crop failure due to hail was also prominent earlier, especially in the western part of the globe which soon spread to Japan, Canada, and other countries.
Agriculture insurance is prevalent in the developed economies of North America and Europe due to support by various authorized bodies. Developing economies pose a significant opportunity for growth with significant investments made by local bodies to provide insurance against potential risk for crop failure. Overall, the global agriculture insurance market is anticipated to witness impressive growth over coming years with CAGR 2.8%.
The vendor landscape of the global agricultural insurance market is highly fragmented due to the presence of several local players. Typically, majority of the players cater to their local market with presence in overseas as well. Companies such as People’s Insurance Company (Group) of China Limited (PICC), the Chubb Corporation, QBE Insurance Group Limited, XL Group Limited, Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft and Tokio Marine Holdings, Inc. have a broader presence within the global market.
Key segments of the global agriculture insurance market
Distribution Channel Overview, 2012 – 2022 (USD Million)
- Direct writing
Insurance Type Overview, 2012 – 2022 (USD Million)
- Crop/MPCI Insurance
- Crop/Hail Insurance
- Livestock Insurance
Regional Overview, 2012 – 2022 (USD Million)
- North America
- Southeast Asia
- South America
- Middle East and Africa
- South Africa