Swiss Re Corporate Solutions agricultural insurance wins Cobertura award
in Brazil

A large billing volume and high operating margin were the factors that led to the company's win. Now, in addition to positioning itself to surpass these results, Swiss Re Corporate Solutions intends to increase its offering of revenue insurance, an innovative product that it brought to Brazil convinced that it is the future of agricultural insurance.

Swiss Re Corporate Solutions, the commercial insurance arm of the Swiss Re Group, was the grand winner of the 15th Edition of the 2012 Cobertura Performance Award in the agricultural insurance category. The award ceremony was held on 26 November at the Centro Fecomércio de Eventos in São Paulo, sponsored by the publishing house Editora Cobertura.

Swiss Re Corporate Solutions' agricultural insurance was chosen for the award following an evaluation performed by the Economist Francisco Galiza, of the consulting firm Consultoria Rating de Seguros. The main factors taken into account were the ranking within the line, the history of the company, its operational profitability (retained losses/premiums earned) and commissioning (selling expenses/premiums earned).

Strong performance and growth

José Cullen, Director of Agriculture at Swiss Re Corporate Solutions, commented that the award acknowledges the company's effort to expand its portfolio of agricultural insurance. He said that in 2002, when the line of business was launched, agricultural insurance was still nascent and problematic. Its loss experience was high and dedicated specialists were scarce. "But thanks to the effort the company made and its hard work, this situation turned around over the past ten years to the extent that its strong performance has now been recognised with this award," he said.

Mr Cullen added that, according to the results obtained to date, Corporate Solutions should surpass 2011's billing by 10%, with a volume of insured capital amounting to approximately BRL 1.5 billion (USD 719 million). For 2013, the company plans to continue raising the profile of agricultural insurance with a view to maintaining constant growth.

Innovation and expertise

Corporate Solutions positive performance in agricultural insurance is the result of a number of initiatives that give top priority to innovation, thereby applying the expertise of the Group in this area. The company was the first to introduce farm revenue insurance in Brazil in 2010. This type of insurance accounts for 80% of the agricultural insurance market in the United States.

The insurance covers the loss in a farmer's revenue in case of a climatic event or a variation in price for the commodity, based on his own individual productivity. In short, this means that a portion of the revenue the farmer expected from selling his produce will be covered, and not only crop funding expenses.

Although the product might seem complex for farmers, Mr Cullen says that the compensation received by many is helping to disseminate its benefits and advantages.

A perfect example is the case of a farmer in Paraná in Southern Brazil, whose children saw no point for him to invest in insurance an amount equivalent of the price of a popular car. "Even so, the farmer purchased the insurance and when he encountered a loss, he received the equivalent of eight popular cars. This convinced not only his children of the importance of having insurance, but also other farmers, who then became interested in the product," Mr Cullen explained.

By now, farm revenue insurance has already been chosen by multiple cooperatives as the ideal product for all of their members.

Broad agricultural insurance portfolio

Another innovation offered by Corporate Solutions is its crop shortfall insurance, a parametric insurance solution with customised coverage to match the specific needs of each company in the agribusiness supply chain. Using official indices, crop shortfall insurance protects the exposed portfolios of clients when there is a crop shortfall to prevent potential financial losses.

The company's agricultural insurance portfolio also includes traditional insurance products such as farm insurance, which protects agricultural producers from losses resulting from adverse climatic phenomena such as hail, frost, gale, drought and excessive rain. It also includes livestock insurance, which offers full coverage for donkeys, cattle, buffaloes, goats, horses, mules, sheep and pigs, e.g. for life, transport, clinical or surgical reimbursements, as well as fertility and pregnancy risks.


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