Pilot 3
Insurance services for agriculture
Pilot lead: BSC CNS
To support adaptation to climate change and variability through better climate risk management in agriculture, this pilot aims to co-develop a demand-driven, index-based insurance (IbI, also often called parametric insurance) solution that meets farmers' needs while ensuring viability for insurance providers. Collaborating with both farmers and insurers, we will demonstrate the potential application of IbI in diverse local contexts across the EU.
In the pilot’s first phase, we will focus on the Boreal region in
Finland, working with project partner LocalTapiola, an insurance
provider, to explore the market potential and regulatory framework
for IbI. In support of developing IbI products, we will provide
indicators related to the weather phenomena impacting crop
production in the region.
Expanding to the Mediterranean region, we will closely engage with
ASAJA Jaén, a farmer association of olive farmers in the Andalucía
region of Spain, to understand local needs and demand, among other
potential stakeholders. Through surveys, discussions, and analyses
of past climate impacts on crop yields, we will identify the climate
indicators relevant to olive production in Andalucía, as well as the
associated trigger and exit thresholds for insurance payouts based
on farmers' self-reported past “bad” years. This would enable us to
derive such parameters as risk premium and payout multiplier for the
co-design of a tool to support IbI products, to be showcased to
insurance companies that may be interested in introducing such
products into the Spanish market.
Finally, the pilot will explore scaling opportunities across the EU, refining the tools to ensure adaptability across diverse agricultural and climatic settings. The insights gained from both the Boreal and Mediterranean contexts will inform broader strategies for extending these innovative insurance solutions to other regions, supporting EU-wide agricultural resilience.