What would happen if an insurance company could have access to precision ag data from your farm in the process of helping write policies for crop coverage? That question is about to be answered with the announcement today (Feb. 13) that FarmersEdge is entering a four-year, exclusive agreement with PartnerRe, a key reinsurance firm in agriculture and crop insurance. The tech company and the reinsurance company will work with partner insurance firms to help enhance private crop insurance products in 2018 and beyond.
In the insurance industry, farmers work with Approved Insurance Providers for crop insurance and even private products. But those insurers insure their own product with reinsurance firms, and PartnerRe is an $8 billion firm that serves insurance companies around the globe.
Ron Osborne, chief strategy officer, FarmersEdge, explained that his firm has been looking for ways to help customers around the world. "We have found some big opportunities in crop insurance," he noted. "Crop insurance is a broad term and there are regulatory differences in each market."
He explained that products and services North American farmers take for granted do not exist in a lot of other parts of the world including Latin America Eastern Europe. "How do you rate a policy with no historical soil data, no field imagery or even the ability to send data wirelessly over a cellular infrastructure?"
FarmersEdge is offering information on several fronts that have value to those insurance firms. And for the first time, many will have access to crop insurance for the first time through this new relationship.
The deal aims to bring FarmersEdge technology to at least 20 million acres of new farmland within four years. The key is combining digital agronomy with customized insurance products based on real-time data at a hyperlocal level. And for those more remote markets, there are new opportunities. In Brazil, for example, only 10% of the farms are insurance today.
In North America, though farmers have access to crop insurance through several AIPs, most of those companies work in the reinsurance market with PartnerRe. This new relationship will mean those companies can have access to the data gathering tools available from FarmersEdge.
"We are the exclusive distributor of Planet imagery," Osborne said. "We have access to daily, global satellite imagery."
Combine that with the telemetry product from the company along with the network of local weather stations, and farmers may someday be able to better negotiate their coverage based on real-time data. But Osborne noted it could go farther:
"We're excited, though this is not live today, but we are working with insurance groups and there are some really neat things coming for the farmer with these technologies," he said. "For example, if a hail event comes through on Monday, the farmer could be paid on Tuesday."
That kind of coverage would be based on algorithms that would look at the satellite and weather data and determine the true crop damage from a hail event. "Think what that could mean to a farmer in making a decision to replant," Osborne added. "They don't have to wait for weeks for a payment, they could move forward right away."
This new relationship is the start of innovation for the two companies. With real-time data, there could be other information that might better fine-tune insurance products and help farmers get coverage for the long term, perhaps at a better price, or more coverage for the same money. The development has just begun.
In addition, innovation could move up the chain for public products cleared by USDA's Risk Management Agency. Osborne noted that FarmersEdge and PartnerRe are working with insurance companies to develop the dialogue with RMA on future products. "RMA has strict guidelines. Right now, we're working on the private products side of the business. We're working with PartnerRe and AIPs so they can have integrated systems of data gathering so they don't have to cobble things together," Osborne said.
He added that the companies are working with insurance carriers to develop strategies for speaking to RMA about innovations designed to move the industry forward.
Bringing real-time ag data to crop insurance offers interesting potential for the future. That hail - quick payment - program is no on the market. But shows the potential for innovation that exists. To learn more about this program, visit farmersedge.ca.