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Agriculture Insurance Market

Agriculture Insurance Market: Information by Product (Managed Crop Hail Insurance, Aquaculture Insurance, Forestry Insurance), Organization (Government, Private), and Region — Forecast till 2031

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Market Snapshot

market snapshot
Base Year:
2022
Study Period:
2021-2031
CAGR:
3.15 %
Fastest Growing Market:
Europe
Largest Market:
North America

The Total Addressable Market (TAM) for Agriculture Insurance was valued at USD 36.52 billion in 2022. It is projected to reach USD 48.27 billion by 2031, growing at a CAGR of 3.15% during the forecast period (2023–2031). Farmers can safeguard their crops and agricultural products from weather-related losses like flood, drought, and hail, as well as price-related losses caused by a fall in commodity prices, by purchasing agriculture insurance. The agricultural sector as a whole is vulnerable to the effects of agricultural risks. They are also generally relevant to farming, including livestock, bloodstock, forestry, aquaculture, and greenhouses. Agriculture insurance can potentially be an essential weapon in the fight against and eventually eliminate poverty. Unfortunately, farmers who have made substantial investments in agricultural infrastructure are particularly vulnerable to the devastating effects of natural disasters, which can leave them deeply in the red and sometimes even bankrupt. If the farmer has agriculture insurance, he can file a claim and get his money back if anything goes wrong. Financial support allows farmers to reinvest in their businesses.

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Market Dynamics

What are the Driving Factors for Agriculture Insurance?

Favorable Government Initiatives

Increased government support for protecting farmers against volatility in incomes, prices, and yields has resulted in a wider variety of options for crop insurance coverage. In countries like the United States and India, where agriculture is a vital economic sector, the growing complexity of agricultural risk impacts the sector as a whole due to factors like shrinking farmland, climate change, and rising prices. Many governments have responded by enacting supportive policies aimed at the agricultural sector, contributing to the expansion of related markets. The United States Department of Agriculture offers a premium incentive to farmers who sowed cover crops during the 2022 crop year (USDA). To be eligible for this year's Pandemic Cover Crop Program, producers must report cover crop acreage by March 15, 2022.

What are the Main Factors that will slow down the Market for Agriculture Insurance?

Lack of Awareness about Agricultural Insurance Products and Schemes

The global agriculture insurance market faces significant limitations from a lack of standardized systems and awareness about the concept of agriculture insurance. Climate change is predicted to increase the frequency of extreme weather events like drought. Constantly shifting global market conditions and volatile domestic growing conditions pose serious threats that farmers must continuously navigate. The predicted expansion of the Global Crop Insurance Market could be stifled by factors such as a lack of knowledge about the market, policies, claim benefits, and rising insurance premiums.

What are the Future Opportunities for Agriculture Insurance?

Advancement in Technology in Agricultural Insurance

The global crop insurance market has flourished thanks to the incorporation of ICT, which has enabled the easy availability of insurance and several other features. For example, a geo-referenced solid cadastral map base and its linkage with land records data are used to control the threat of over-reporting the insured area and make the enrollment process more accessible. The rapid expansion of the crop insurance market can be directly attributed to the widespread use of A.I. technology for tailoring policies to individual farmers. Predicting yield and profit using CCE using A.I. can be done, as well as gaining many ecological insights, such as those related to water stress and crop health, from these experiments.

Segmental Analysis

The global agriculture insurance market is segmented by product and organization.

Based on product, the global agriculture insurance market is bifurcated into managed crop hail insurance, multi-peril crop insurance, greenhouse insurance, aquaculture insurance, and forestry insurance.

The multi-peril crop insurance segment is the highest contributor to the market and is expected to grow during the forecast period. It is due to the benefits gained and the fact that many farmers employ crop diversification and seasonal rotation strategies to increase yield and income. Farmers buy crop insurance to hedge against financial losses resulting from natural disasters or sharp drops in commodity prices (floods, hail, pests, diseases, drought, etc.). Before planting a crop, farmers must purchase MPCI policies under federal regulations. The policy may include incentives to replant or penalties for failing to replant if the damage is discovered early enough in the growing season. As a result, MPCI is forecasted to maintain its market dominance through the forecasted period thanks to the many benefits it provides.

Based on the organization, the global agriculture insurance market is bifurcated into government and private organizations.

The government segment is the highest contributor to the market and is expected to grow during the forecast period. The increase in government assistance meant to safeguard farmers against price, livestock, and crop fluctuations is a significant factor in developing the agricultural insurance market. Moreover, subsidy funding enables the insured to access agricultural coverage with a more comprehensive range of options and customizations. Many agricultural insurance policies feature government support for insurance premiums. Besides the hail insurance market, governments are actively promoting the development and expansion of agricultural insurance, typically subsidizing premiums.

Regional Analysis

The global agriculture insurance market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

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North America is the most significant shareholder in the global agriculture insurance market and is expected to grow during the forecast period. The agriculture insurance market in North America is expected to grow due to demand from emerging economies and rising consumer awareness of the importance of comprehensive insurance and risk management strategies. The growth of the North American market can also be attributed to local manufacturers increasing their spending on cutting-edge technology. However, the total output is high compared to the population's food demand, so a considerable proportion of agricultural output is exported. It is because a large portion of the production area is devoted to vast grazing in low-yield arid regions.

Europe is expected to grow during the forecast period. People are paying more attention to increasing agricultural productivity because the population is proliferating, and the food demand is rising. There are a lot of big players in the area. Market growth in the region is caused by more people becoming aware of the benefits of agriculture insurance. Switzerland's most famous crop insurance plans cover damage from hail and other primary risks like flooding or storms. France has a long history of buying crop insurance to protect against weather-related threats.

Asia-Pacific is a big player in the agriculture insurance market because it is prone to natural disasters like typhoons, floods, landslides, droughts, earthquakes, volcanic eruptions, and tsunamis. Risks caused by the weather affect crop yields, incomes, assets, and the safety of people in vulnerable groups across the region. In Asia and the Pacific, agricultural insurance systems range from large government-run programs in India and the Philippines to partnerships between the government and the private sector. In Asia and the Pacific, agricultural insurance systems range from large public programs in India and the Philippines to public-private partnerships.

In the LAMEA region, the agriculture insurance market has a lot of room to grow, especially in countries like Algeria, which are known for their agriculture. As Latin America's share of the world's agricultural output grows, it has become more critical to intelligently protect crop and livestock production. The Latin American agricultural insurance market has a lot of room to grow, either because more people buy insurance or because new products come out. Together, Brazil and Mexico spend 90% of the government's money on agriculture insurance. Agriculture Insurance has a lot of growth potential in the region, but it still has a long way to go before it can reach its full potential.

Competitive Landscape

The global agriculture insurance market’s major key players are Allianz SE, American Agricultural Insurance Company, Aries Argo Limited, HDFC ERGO General Insurance Company Limited, Philippines Crop Insurance Corporation, Rural Community Insurance Company, and Tata AIG General Insurance Company Limited.

Recent Developments

  • February 2022- The HDFC ERGO General Insurance Company has introduced a new Cyber Sachet Insurance Policy, a specialized cyber insurance product designed to protect consumers from cyber-related and digital risks.
  • October 2022- Allianz has finished its purchase of a controlling interest in Jubilee's general insurance operations in East Africa.

Report Scope

Report Metric Details
Market Size USD in 48.27 Billion By 2031
CAGR CAGR 3.15%
Historical Data 2015-2016
Base Year 2017
Forecast Period 2018-2026
Forecast Units Value (USD Billion)
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
Segments Covered by Product (Managed Crop Hail Insurance, Multi-Peril Crop Insurance), Organization (Government, Private)
Geographies Covered North America, Europe, Asia-Pacific, LAME and Rest of the World
Key Companies Profiled/Vendors Allianz SE, American Agricultural Insurance Company, Aries Argo Limited, HDFC ERGO General Insurance Company Limited, Philippines Crop Insurance Corporation, Rural Community Insurance Company, Tata AIG General Insurance Company Limited. The People's Insurance Company of China and Universal Sompo General Insurance Co. Ltd.,
Key Market Opportunities High Demand In Technology Sector Is Pushing Agriculture Insurance Market

Global Agriculture Insurance Market: Segmentation

By Product

  • Managed Crop Hail Insurance
  • Multi-Peril Crop Insurance
  • Greenhouse Insurance
  • Aquaculture Insurance
  • Forestry Insurance

By Organization

  • Government
  • Private

By Regions

  • North America
  • Europe
  • Asia-Pacific
  • LAMEA
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