Morningstar DBRS, the credit ratings agency, has stated that severe and persistent weather events in southern Spain are adding pressure to the country’s agricultural insurance framework, while leaving private insurers largely insulated from material losses.
In its latest commentary, Morningstar DBRS highlighted that Andalusia, which it rates A (high) with a Stable trend, has been affected by several weeks of extreme weather driven by Storms Leonardo and Marta. According to the agency, the storms have delivered record rainfall, widespread flooding, landslides and evacuations, disrupting economic activity across the region and severely affecting the agricultural sector.
Morningstar DBRS noted that extensive farmland has been submerged and crops destroyed due to continuous rainfall. Citing information from the Andalusian Regional Government and COAG, one of Spain’s main farmers’ unions, the agency reported that around 20% of Andalusia’s total agricultural output has already been impacted.
Winter vegetables, citrus orchards and vineyards are among the most affected, with potential losses estimated at more than EUR 3 billion. In addition, Morningstar DBRS expects approximately EUR 100 million in further damage to property, vehicles and individuals.
Morningstar DBRS explained that Spain’s Seguro Agrario Combinado (SAC), created in 1980, operates as a public-private co-insurance mechanism under which multiple private insurers jointly underwrite agricultural and livestock risks. The agency emphasised that coverage is standardised but calibrated to reflect crop characteristics and geographic exposure, with premiums determined by underlying risk profiles. It also pointed out that both national and regional governments provide subsidies to ensure the system remains accessible to producers.
According to Morningstar DBRS, the state-owned Consorcio de Compensación de Seguros plays a pivotal role within this framework. The CCS assumes a fixed 10% quota share of every SAC policy and provides excess-of-loss reinsurance protection to the private co-insurers, thereby strengthening the system’s capacity to withstand catastrophic events. The agency further noted that Agroseguro, the entity coordinating insurers within the SAC structure, was primarily owned at the end of 2024 by Caser SA (21%), Mapfre SA (18%), Agropelayo SA (14%), Seguros Generales Rural SA (13%) and Allianz SA (8%).
“Insured losses will be likely absorbed either by the SAC or the Consorcio de Compensación de Seguros (CCS),” added Mario De Cicco, Vice President, Global Insurance and Pension Ratings at Morningstar DBRS. “As a result, the impact on private insurers will be negligible in our view.”
Morningstar DBRS reported that total claims paid by Agroseguro reached EUR 804 million in 2025, representing a 13% increase from the previous year and marking the second-highest annual level in the past decade. The agency observed that only 2023 recorded higher losses, at EUR 1,241 million, largely due to severe drought conditions. In Andalusia specifically, claims totalled EUR 63.4 million in 2025, up 40% year on year, and Morningstar DBRS expects claims to rise further in 2026 as the effects of recent storms materialise.
While acknowledging that claims in 2025 increased compared with 2024, Morningstar DBRS stated that they remained broadly aligned with the five-year average. Nevertheless, the agency cautioned that the growing frequency and severity of extreme weather events are exerting upward pressure on the SAC’s loss experience and on the reinsurance support provided by the CCS.
This pressure, it added, has been partly mitigated by sustained growth in premium volumes, which have expanded consistently over the past decade and exceeded EUR 1 billion for the third consecutive year in 2025, reaching EUR 1,029 million compared with EUR 673 million in 2016.
Beyond agricultural damage, Morningstar DBRS assessed that the flooding and destructive winds associated with Storms Leonardo and Marta qualify as extraordinary risks under Spain’s insurance regime. As such, insured losses arising from these events are expected to be absorbed by either the SAC or the CCS. The agency concluded that both mechanisms maintain adequate loss-absorption capacity, providing a substantial buffer that shields private insurers from significant financial strain.
Overall, Morningstar DBRS considers that although extreme weather is increasing pressure on Spain’s agricultural insurance system, the country’s established public–private structure continues to protect private insurers from exceptional losses while ensuring coverage for affected sectors.
