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The crop insurance market size is estimated to grow at a CAGR of 6.22% between 2023 and 2028. The market size is forecast to increase by USD 14.62 billion.The several factors play a crucial role in the market's growth, such as the extreme weather conditions due to global warming, the rise in government support for crop insurance, and the expansion of crop insurance product lines.
The report offers extensive research analysis on the Crop Insurance Market, with a categorization based on Product, including indemnity-based and index-based. It further segments the market by Type, encompassing crop-yielded insurance and crop revenue insurance. Additionally, the report provides Geographical segmentation, covering APAC, Europe, North America, Middle East and Africa, and South America. Market size, historical data (2018-2022), and future projections are presented in terms of value (in USD billion) for all the mentioned segments.
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Our researchers analyzed the data with 2023 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.
The extreme weather conditions due to global warming are notably driving the crop insurance market. 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.
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.
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.
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.
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 Nad 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.
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.
Global Crop Insurance Market Customer Landscape
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.
Agriculture Insurance Co. of India Ltd: The company offers crop insurance solution aiming to cover risks related to agriculture and allied activities.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative 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. 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.
The indemnity-based segment is estimated to witness significant growth 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 the largest segment and was valued at USD 32.23 billion in 2018. 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.
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APAC is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Another region offering significant growth opportunities to companies is North America. 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.
The crop insurance market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
Crop Insurance Market Scope |
|
Report Coverage |
Details |
Page number |
167 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.22% |
Market Growth 2024-2028 |
USD 14.62 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.65 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 33% |
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., Allianz SE, American International Group Inc., Aon plc, AXA Group, Bajaj Finserv Ltd., Chubb Ltd., Everest Re Group Ltd., Hannover Re, ICICI Bank Ltd., Indian Farmers Fertiliser Cooperative Ltd., MARSH LLC, Munich Reinsurance Co., QBE Insurance Group Ltd., Reliance Industries Ltd., Sompo Holdings Inc., State Bank of India, Sundaram Finance Ltd., Swiss Re Ltd., and Willis Towers Watson Public Ltd. Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, 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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