The drought in Spain would be the largest claim ever paid by the Spanish agricultural insurance, according to professional services firm Aon.
Agroseguro, the leading agricultural insurance provider in Spain, is bracing for an unprecedented payout of over €300 million ($325 million) in compensations due to the widespread damage inflicted by this year’s severe drought in Spain.
With an estimated 1.5 million hectares (3.7 million acres) of arable crops adversely affected, the agricultural sector faces its most substantial claim ever, Aon stated in its Weekly Cat Report on May 26.
In response to the prolonged drought crisis, the Spanish government has given the green light to a comprehensive plan worth €2.2 billion ($2.4 billion).
Spain finds itself in the grip of an alarming situation as soaring temperatures, prolonged dry spells, and an alarming precipitation deficit have intensified wildfires and exacerbated drought conditions across the country.
Recent wildfires in Estremadura Province have escalated the severity of the crisis, with the number of fires and total burned area reaching their highest levels since 2006 for this time of year.
Data from the European Forest Fire Information System (EFFIS) reveals that Spain has witnessed the highest number of fires and the most extensive burned area since 2006.
The dire consequences of this extreme weather are further compounded by severe agricultural losses, with estimated damages reaching hundreds of millions of euros.
The latest wave of wildfires has particularly impacted Estremadura Province, where over 12,000 hectares (29,700 acres) of land have succumbed to the relentless flames in the past week alone.
Faced with the imminent danger, hundreds of residents have been compelled to evacuate their homes due to approaching fires.