Drought is insurable

Swiss Re's Soil Moisture Deficit Index Insurance protects farmers in Kazakhstan against the financial losses caused by drought. We have developed an innovative solution for drought related losses, applicable to all rain fed agricultural production worldwide.

Kazakhstan is one of the largest grain producers and exporters in the world. However, drought frequently endangers large parts of the country and is the number one threat to farmers.

Due to climate change, both the frequency and impact of droughts may increase in the future and worsen the already difficult situation for the local farmers. With an efficient insurance protection farmers can invest more in production and as such reduce the volatility of their income.

Soil Moisture Deficit Index Insurance – an innovative solution for Kazakh farmers

SwissRe, in close cooperation with the Dutch specialist company "VanderSat", developed an effective soil moisture deficit index insurance. Contrary to traditional crop insurance where insurance payout is based on loss adjustment in the field, Swiss Re's index insurance pays out in case the soil moisture deficit reaches a pre-defined level. The soil moisture deficit is closely linked to the drop in yield that occurs due to drought.

The advantages of Swiss Re's solution:

  • Soil moisture is a parameter that is intuitively understood by farmers
  • As we use daily soil moisture data, payouts can be very fast
  • The product is cost efficient as the laborious loss adjustment is not needed
  • Adverse-selection can be minimized
  • The insurance process is fully digitized and runs over blockchain
  • The set-up and the insurance product are easy to scale

Swiss Re's Soil Moisture Deficit Index Insurance is applicable worldwide.

Find out how we can together develop innovative solutions for the agro business in your market.

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