Agriculture Reinsurance Market Size, Share & Trends Analysis Report By Product (Managed Crop Hail Insurance, Multi-Peril Crop Insurance, Livestock Insurance, Greenhouse Insurance, Aquaculture Insurance, Bloodstock Insurance, Forestry Insurance) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The agriculture reinsurance market size is expected to grow at a CAGR of 11.2% during the forecast period, 2022–2030.

Agriculture reinsurance refers to the production and financial risks of farmers and associated shortfall risks of interrelated stakeholders such as input suppliers and grain processors. Agriculture reinsurance is, in simple terms, insurance taken by insurers. When a risk or group of risks presage a hazard beyond the pale, it is high time for an insurance company to claim reinsurance, i.e. insurance of the insurance. This purchase is also known as ‘ceding.’

In reinsurance, the risk and premium are transferred to other insurers, which distributes the risk and substitutes for equity debt. Reinsurance plays a major role in agriculture insurance as a consequence of the government’s engagement via subsidized reinsurance and through broad participation of the private reinsurance industry.

Reinsurance has many advantages such as deducing the results of the insurance company over a period and limiting the exposure of individual risks and restricting losses paid out by the insurance company. Agriculture insurance contains complexities that arise from the characteristics of the risks covered and asymmetries of information, and potential moral hazards have encouraged the development of specialized underwriters and loss adjusters, who have the skills and expertise to practice in the agriculture insurance market. The design of suitable agricultural reinsurance programs is subject to similar complexities and requires skill and expertise.

Market Dynamics

Uncertainty of nature, governments’ support for agricultural activities, and technology revolution are some of the growth factors for the global agriculture reinsurance market. Old problems can be encountered with modern solutions with the technology revolution. The use of satellite images enables efficient loss assessments in agro (re)insurance and a detailed image of the damages by satellite can assess its exposure in real-time, which helps to know the potential risk in advance. Also, technology contributes in mitigating the asymmetry of information between the (re)insurers and the insured. Therefore, technological advancements bolster the demand for agriculture reinsurance.

The increasing need for an alternative to shareholder’s capital to meet the massive demand drives market growth. Reinsurers minimize damage, provide capital for the real economy, and prevent risks. Additionally, strong government support in various countries across the globe is also boosting market growth. For instance, the Indian Government is committed to funding reinsurance schemes due to lucrative social and economic benefits of the robust crop insurance market. On the flip side, poor clarity of exposures and lack of awareness are expected to impede the growth of the agriculture reinsurance market around the globe.

Regional Analysis

Geographically, the global reinsurance market is studied across North America, Europe, Asia-Pacific, and LAMEA.

The U.S. government provides significant reinsurance support. Successful and advanced space and weather monitoring technologies boost the growth of the agriculture reinsurance market in North America. Many different public policy tools are used in different parts of the U.S., ranging from specific legislations to ministerial decisions and public funds designed to promote the use of some coverage or provide ex post responses, especially in the course of damaging weather events.

In Europe, the public sector plays an important role in agricultural reinsurance, either in the form of public sector reinsurers (Spain and Turkey) or through the arrangement with the government to settle surplus claims (Italy and Poland).

Asia-Pacific is a prominent region for the agriculture reinsurance market because of natural diversification owing to a large number of agro-climatic zones. Agriculture, being a primary economic zone, contributes 18% of India’s GDP and employs 47% of the country’s workforce (Economic survey 2014–15, as stated by Swiss Re Indian Agricultural Insurance Forum). Therefore, significant opportunities exist for reinsurance in India’s agriculture sector.

LAMEA is expected to grow at a significant rate, owing to the region’s immense potential for reinsurance companies. For instance, three reinsurance companies from France, Morocco, and Bermuda have joined forces to establish a reinsurance company called Mamda Re to cover agricultural risks in Moroccan and African markets.

Segmental Analysis

The global agriculture reinsurance market demonstrates a wide array of products, which enables the implementation of strategic segmentation according to particular offerings. Managed crop hail insurance, multi-peril crop insurance, livestock insurance, greenhouse insurance, aquaculture insurance, bloodstock insurance, and forestry insurance are the principal products.

Agriculture reinsurance, an essential element of risk management within the agricultural industry, is particularly widespread in the domains of multi-peril crop insurance and managed crop hail insurance. These products address the distinct obstacles and vagaries encountered by farmers, furnishing an all-encompassing safeguard against a range of dangers and guaranteeing the long-term viability of agricultural endeavors. The provision of reinsurance alternatives for these particular products demonstrates the agricultural sector's dedication to preserving and bolstering the worldwide agricultural environment.

Impact of covid-19

The COVID-19 pandemic has caused a global healthcare crisis, resulting in a change in healthcare delivery in most areas. Most unrelated surgeries were postponed in the first half of 2020 to slow the spread of the virus and reduce the strain on healthcare infrastructure. According to Indiana University researchers, healthcare visits declined by approximately 40% in the first six weeks of the pandemic in the U.S, from early March to mid-April.

Following the relaxation of constraints, there has been a general decrease in people postponing seeking care and treatment in healthcare facilities. Furthermore, the slowdown in clinical trial enrollment has pushed back the launch of novel treatments. These considerations may have had a detrimental influence on the autoinjector industry, particularly with its usage in healthcare facilities beginning in early 2020.

However, the overall effect on the autoinjectors market is considered positive, especially during the forecast period, due to several factors. In the biologics space, there has been a shift toward higher delivery volumes and less frequent dosing, which can be achieved through suitably customized autoinjectors.

The COVID-19 pandemic has accelerated the trend of self-injection, allowing patients to be more involved and in charge of their treatment. The trend boosted newer technology in the autoinjector market for improved regulation of injection speed, injection site discomfort, and treatment of anxiety.

Recent Developments