Crop Insurance Market Analysis North America, APAC, Europe, South America, Middle East and Africa - US, Canada, China, India, Spain - Size and Forecast 2024-2028

Crop Insurance Market Size 2023-2027

The Crop Insurance Market size is forecast to increase by USD 14.82 billion at a CAGR of 6.63% between 2022 and 2027. Market expansion hinges on numerous factors, notably the escalating impact of extreme weather conditions attributed to global warming. This has spurred a heightened awareness of environmental sustainability, pushing industries and governments towards eco-conscious initiatives. Additionally, there's a notable surge in governmental backing, advocating for sustainable practices and investments in climate-resilient technologies. This support fosters innovation and encourages businesses to adopt greener strategies, leading to the development of resilient infrastructure and eco-friendly solutions.

What will be the size of the Market During the Forecast Period?

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Market Dynamics and Customer Landscape

The market is driven by a multitude of factors, including the need to stabilize farmers' incomes amidst unpredictable weather conditions like droughts, hail, floods, and fires. It also addresses challenges such as diseases and pest infestations affecting agricultural produce like seasonal and valuable crops. Trends in the market include the integration of advanced technologies like satellites, drones, and artificial intelligence for risk assessment. However, challenges persist in determining farmer premium rates and ensuring an assured amount in the face of local calamities and import-export rate fluctuations. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The extreme weather conditions due to global warming are notably driving the market industry.  Because of global warming, extreme weather events like drought, extremely heavy rainfall, and wildfires are occurring more frequently. Additionally, all over the world, agricultural production is negatively impacted by floods, hurricanes, droughts, and excessive rainfall. The output and production of farms are significantly impacted by unfavorable weather conditions like monsoons and droughts. These extreme weather conditions can harm crops, costing farmers money and having a negative impact on the economy.

Moreover, the National Oceanic and Atmospheric Administration of the United States claims that scientists have discovered a significant link between climate change and extreme weather occurrences. Crop insurance has, therefore, become more popular as a result of the increased risk of crops being harmed by these occurrences. Hence, these factors will drive the growth of the market during the forecast period.

Significant Market Trends

The increasing reach of crop insurance schemes among farmers is an emerging trend in the market. Farmers now have easier access to information due to smartphones' quick adoption. They are now more informed about all the various changes occurring in the agricultural industry, such as the various programs on crop insurance. For instance, Reliance General Insurance announced in October 2020 that it had partnered with SatSure to provide satellite-based crop monitoring and support for predictive analytics for better risk management and to increase the effectiveness of its crop insurance business operations. This will facilitate the interaction between farmers and their crop insurance agents.

Additionally, a mobile insurance product called Kilimo Salama allows for payments via smartphones in Kenya. These apps offer details on the insurance premium for all crops and the amount of coverage that farmers will receive for any crop. Therefore, these factors will fuel the market growth during the forecast period. 

Major Market Challenge

The low awareness of crop insurance is a major challenge impeding market growth. Farmers may not be able to claim assistance in the event of a reduced yield due to unfavorable conditions because they have insufficient knowledge of crop insurance. Since buying high-quality seeds and fertilizer is more important to small farmers than crop insurance, they have less incentive to pay the premiums. It can be difficult for small farmers to obtain loans and credit for these necessities. Non-governmental organizations (NGOs) and insurance agents are both essential to raising awareness of agricultural insurance programs. However, agents may act unethically by refusing to pay out on insurance claims or misleading farmers about crop insurance options.

Moreover, crop insurance is not widely known and adopted in developing nations, and insurance programs are only occasionally put into place. For example, three districts in the Indian state of Tamil Nadu, namely, Ramanathapuram, Trichy, and Thiruvarur, had varying rates of crop insurance adoption in 2020. Farmers in Ramanathapuram and Thiruvarur received 38% and 53%, respectively, of the claims paid out by companies offering agricultural insurance, while farmers in Trichy received only 2%. Hence, the absence of parity in insurance claims can hinder the adoption of crop insurance. These factors will likely affect the market growth during the forecast period. 

Market Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Market Customer Landscape

Who are the Major Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

AmTrust Financial Services Inc. - The company offers crop insurance services. 

The report also includes detailed analyses of the competitive landscape of the market and information about 14 market companies, including:

• Agriculture Insurance Co. of India Ltd.
• American Financial Group Inc.
• American International Group Inc.
• AXA Group
• Chubb Ltd.
• Groupama Assurances Mutuelles
• Indian Farmers Fertiliser Cooperative Ltd.
• QBE Insurance Group Ltd.
• Santam Ltd.
• Sompo Holdings Inc.
• The New India Assurance Co. Ltd.
• Zurich Insurance Co. Ltd.
• ICICI Bank Ltd.
• Tokio Marine Holdings Inc.

Qualitative and quantitative market research and growth analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. In market growth analysis, data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segment in the Market?

The Market is a critical component of modern agriculture, aiming to provide stability and security to farmers and their income amidst a range of weather conditions and natural calamities. Forecasted periods play a vital role in assessing risk and determining the effectiveness of revenue policies designed to stabilize farmers' incomes. This market covers a wide array of aspects, from agricultural produce and import-export rates to farming techniques and the cultivation of seasonal crops. It also integrates advanced technologies such as satellites, drones, and the Internet of Things (IoT), alongside artificial intelligence systems for risk assessment. Key offerings include crop yield insurance and crop revenue insurance, ensuring an assured amount in case of droughts, hail, floods, fires, diseases, or pest infestations affecting valuable or specialty crops. Moreover, market crop loans and farmer premium rates are tailored to provide financial assistance during local calamities and changes in weather conditions.

The market share growth by the indemnity-based segment will be significant during the forecast period. The policyholder is shielded from losses incurred by crop loss by indemnity-based insurance. According to the number of losses, this type of insurance determines how much to pay out in claims. Due to the fact that underwriting is done for farms, this type of insurance is expensive to administer. This insurance comprises the most popular types of crop insurance, namely MPCI (Multi-Peril Crop Insurance) and peril insurance.

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The indemnity-based segment was valued at USD 31.52 billion in 2017 and continued to grow until 2021. MPCI is mainly suitable in a public-private partnership (PPP) model and is most popular in developing countries. The majority of agricultural risks are covered by MPCI, which is comprehensive insurance. It includes yield losses caused by natural disasters. This insurance typically covers the entire amount of losses. Administrative costs for this insurance are high because assessments at the farm level are necessary. By providing premium subsidies, various governments are attempting to encourage the adoption of MPCI. The availability of such subsidies for crop insurance plans may increase interest in and use of such plans. Hence, the market segment is expected to grow owing to such factors during the forecast period. 

Which are the Key Regions for the Market?

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APAC is estimated to contribute 31% to the growth of the global market during the forecast period. Another region offering significant growth opportunities to companies is North America. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

The US and Canada are the two countries in North America that dominate the market in terms of revenue. The majority of crop insurance in the world is purchased in the US. According to the Risk Management Agency (RMA) of the United States Department of Agriculture (USDA), agricultural producers who are covered by the majority of crop insurance policies will be qualified for a premium benefit from the USDA under the Pandemic Cover Crop Program (PCCP). Producers who planted an eligible cover crop during the 2021 crop year and insured their spring crops to the fullest extent possible will receive premium support from the PCCP. The support for the premium is USD 5 per acre and cannot exceed the total amount owed for the premium. Under current programs, farmers in Illinois, Indiana, and Iowa can receive a premium benefit for growing cover crops. Farmers who participate will also profit in these states. All of the abovementioned factors will boost the market growth in the region during the forecast period.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments

• Product Outlook 
  • Indemnity-based
  • Index-based

• Type Outlook 
  • Crop yielded insurance
  • Crop revenue insurance

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The Market is deeply intertwined with various facets of agriculture, ranging from agricultural produce and farming technics to valuable crops and specialty crops. It navigates the complex landscape of import-export rates, seasonal crops, and advanced technologies designed to mitigate risks associated with natural calamities like hail, fire, diseases, and pest infestations. The enrollment of farmer information and remotely sensed data aid in location-specific risk assessments, enabling insurance providers to offer farmer premium rates tailored to individual needs. However, challenges such as a lack of understanding among farmers regarding insurance intricacies persist, highlighting the need for continuous education and outreach efforts within the agricultural community.

Moreover, crop insurance acts as a shield for agricultural commodity producers, offering market crop loans, crop yield insurance, and revenue policies to safeguard against unforeseen adversities. This sector is evolving with cutting-edge technologies such as satellites, Internet of Things (IoT), drones, and artificial intelligence, aiding in risk analysis and enhancing food security. Government initiatives play a pivotal role in stabilizing farmers' incomes and promoting agricultural financial stability. They facilitate financial assistance, advisory services, and enrollment of farmer information to streamline insurance policy sales, collection of premiums, and payment of claims. However, challenges like lack of availability and understanding persist, necessitating continuous efforts to bridge these gaps and ensure a robust Market that supports sustainable agricultural practices and secures the livelihoods of farmers.

Furthermore, the Market operates on a dynamic platform where forecasted periods, changes in weather conditions, and local calamities can significantly impact agricultural yield and price risks. This market is intricately linked to agricultural investments and the commercialization of agriculture, reflecting the stability in farmers' income and producer's revenue. One of the core elements of this market is crop insurance, which offers an assured amount to farmers and aims to stabilize farmers' incomes against uncertainties like damaged standing crops and harvested crops due to unforeseen events. Insurance specialists play a crucial role in navigating the complexities of expansion in agricultural risks and fostering farmer awareness regarding insurance policies.

Market Scope
Report Coverage	Details
Page number	163
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 6.63%
Market growth 2023-2027	USD 14.82 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	6.0
Regional analysis	North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution	APAC at 31%
Key countries	US, Canada, China, India, and Spain
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Agriculture Insurance Co. of India Ltd., American Financial Group Inc., American International Group Inc., AmTrust Financial Services Inc., AXA Group, Chubb Ltd., Groupama Assurances Mutuelles, Indian Farmers Fertiliser Cooperative Ltd., QBE Insurance Group Ltd., Santam Ltd., Sompo Holdings Inc., The New India Assurance Co. Ltd., Zurich Insurance Co. Ltd., ICICI Bank Ltd., and Tokio Marine Holdings Inc.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, market report, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across North America, APAC, Europe, South America, and Middle East and Africa
• A thorough market growth and forecasting analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market forecast analysis of factors that will challenge the growth of market companies

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