Bermuda-based property and casualty insurer and reinsurer, Sompo International Holdings Ltd., has announced the introduction of a new innovative agriculture insurance product for the German market, in partnership with German insurer SV SparkassenVersicherung (SV).
The new solution, called SV ErnteIndex, has been tailored to the agricultural sector and offers parametric protection against crop losses caused by drought, heavy frost or prolonged wet weather.
An announcement on the new solution explains that payment is based on a ten-year average crop yield index for the district in which the farm is situated, alongside yield and market price projections that are determined by the farmer at the time of purchase.
Being structured to payout based on a parametric trigger means that it is much faster and simpler to assess a claim and subsequently payout when compared with more traditional insurance products. The typical contract duration is twelve months, and the product is able to be used for a variety of both conventional and organic crops.
Senior Vice President, Global Agriculture for Sompo International, Kris Lynn said: “Through our partnership with SV, we are delighted to bring SV ErnteIndex to the market. This product offers German farmers a simple but effective insurance cover to protect their crops. In catastrophic years such as 2018 when severe drought devastated crop yields, farmers will realize the true value of multi-peril crop insurance.”
Sompo International and SV have been business partners since 2006, and entered into a strategic partnership in 2018 around the introduction of new insurance solutions to the agriculture sector.
Dr. Klaus Zehner, member of the Board of Management for Property/Casualty at SV, added: “The ErnteIndex now offers a solution in which the farmer himself decides how to insure his risks. In addition, we are in discussions with the state to provide additional incentives to make this product even more attractive to farmers.”