Lloyd’s coverholder Meteo Protect has reported a dramatic increase in demand for parametric weather insurance among France’s winemakers following unusually cold temperatures and frost across Western Europe during 2017’s critical spring growing period.
At the May 31st conclusion to Meteo Protect’s spring frost coverage, now in its second year offering, the firm recorded a 15-fold increase in viticulturists subscribing, and a similar increase in the number of brokers in France adding the coverage to their portfolio.
Almost every French vineyard was affected by the poor weather conditions in 2017, with the country’s overall output dropping 17% below the five-year average, while output in Bordeaux, the country’s largest prime wine-growing region, fell 40%.
Meteo Protect’s dedicated weather insurance platform provides customisable parametric triggers that account for the financial consequences of frost severely damaging or killing grape buds, and for the decrease in productivity which results from cold temperatures interrupting the vines’ growing cycle.
Gabriel Gross, Chief Executive Officer (CEO) of Meteo Protect, said: “We have seen an increased demand from France’s wine growers for weather insurance following last year’s spring frost in the region. France experienced significant crop damage resulting from frost last spring, for which all insured growers who suffered losses were compensated.
“In fact, we have seen a dramatic increase in the number of growers subscribing for parametric weather insurance and brokers who now offer our solutions to their clients. We are now looking to increase the number of cooperatives who offer parametric insurance to their members. In addition, parametric insurance protects the cooperative from input shortfall or volume or price fluctuations.”
Only 15% of French vineyards are insured, despite the fact that wine is one of France’s biggest exports, and is highly weather sensitive, with around 10% of wine production lost to natural hazards every year.
Meteo Protect attributes this protection gap to traditional insurance’s expensive premiums and excessively high deductibles, which, it claims, are not well adapted to the needs of wine growers.
It asserts that parametric weather insurance is a preferable option, as it allows growers to select their policy specifications, including geolocation, coverage period, and weather parameters, and ensures that indemnification is simple and automatic, requiring no field loss assessment, deductible, or adjustment.