Risk Monitoring in Crop Insurance

Risk Monitoring in Crop Insurance

The Challenge: Sizing risk.

A large agricultural insurance provider is often overwhelmed by the processing overhead incurred by a large volume of unexpected claims. We are working with them to implement better in-season monitoring of loss risk by region and by crop in order to increase operational efficiency and profitability.

Some outcomes we are co-creating:

  • Near real time monitoring allows for more rapid processing, thus improving customer outcomes
  • More timely alerting to loss scenarios allows for efficient processing, thus lowering costs

How We Do It

We aggregate sub-field risk measures of yield variability and sensitivity of fields to weather changes by crop. For example, some fields in the northern corn belt may be particularly sensitive to flooding after heavy spring rains. We assess the actual risk of these locations and the probability of these flood scenarios, along with the total losses that could accumulate, given the season in progress.

This solution requires sophisticated stochastic weather generation along with measurement of crop progress in season and likelihood for crop stress to occur in tandem with the simulated potential weather.