How Parametric Crop Insurance Offers a New Approach to Managing Agricultural Risk

By AgriBusiness Global

Editor’s note: Weather Risk Management Services (WRMS), a company that develops path-breaking risk management solutions for farmers by leveraging data, technology and financial innovation. WRMS CEO Anuj Kumbhat recently wrote a thought leadership piece for AgriBusiness Global on how parametric crop insurance offers a promising solution by providing quick payouts, reducing costs, and covering weather risks. Below is a summary of that article.

Transforming agricultural insurance from policy to reality involves technological innovation and strategic government support. Addressing challenges small farmers face is crucial for global food security, especially with world population projected to reach 9.1 billion by 2050 – requiring 70% more food production.

Parametric crop insurance offers a promising solution by providing quick payouts, reducing costs, and covering weather risks. But success depends on addressing data accuracy, affordability, and farmer awareness challenges.

Governments, global organizations, insurance providers, and private companies must cooperate to design insurance products tailored for farmers’ unique needs. By utilizing advanced technologies and robust policies, the agricultural sector can transform — boosting resilience against climate change and securing future food supplies.