The global agricultural insurance market, valued at $38.5 billion in 2022, is expected to surge to $67.4 billion by 2032, according to a new Allied Market Research report.
High premiums, particularly burdensome for smallholder farmers, pose challenges for insurance growth.
But using the Internet of Things (IoT), which involves using smartphones and other equipment to transmit data, "holds significant promise for transforming the landscape of agricultural insurance," the report says.
"Currently, IoT data streams are primarily leveraged to streamline insurance processes, including underwriting and claims handling. ... As the collection of data becomes increasingly automated, interconnected tools such as tractors can gather information like crop height, soil moisture, and crop sturdiness. This data can then be transmitted to insurance companies. In response, insurers can provide specific farming recommendations directly to insured farmers."
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Key players driving innovation in the agricultural insurance market include Great American Insurance Company, Agriculture Insurance Company of India Limited (AIC), Allianz SE Reinsurance, and others, the report says.
The market is segmented by product type (multi-peril crop insurance, crop-hail insurance, livestock insurance) and distribution channel (banks, insurance companies). In 2022, multi-peril crop insurance dominated, offering comprehensive coverage against various risks.
North America led the market in 2022, driven in part by economic growth and government initiatives. The COVID-19 pandemic heightened awareness of the importance of agricultural insurance, resulting in increased demand for comprehensive coverage, the report says.
This trend is expected to drive market growth in the coming years.
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