Drought, excess precipitation, hail, frost & more – year after year, crop yields in wider regions of the globe are being affected by increased pressure from climate risks.
Our parametric approach
to crop yield
From North America to Europe, Africa and Asia, the effect of climate risks on crop yields is as widespread as it is complex, combining hydrologic and biophysical consequences.
Descartes’ parametric yield cover simplifies crop protection. Customized to the client’s specific exposure, crop, and location needs, we insure yield variations against the full spectrum of climate risks with a single, straightforward, data-based solution.
Our parametric crop yield product leverages official yield data from trusted and independent sources at district, region, or state levels.
Payouts are tailor-made to each producer’s agreed value per hectare for a given crop, and trigger with no loss-adjustment or farm visits required.
We monitor this data over a historically significant period and detect any climate-induced drops in production.
Available in all parts of the world where official yield data are published, Descartes parametric yield protection is perfectly suited for vineyards, cooperatives, and cereal growers.
Parametric Insurance Case Study: Agriculture Yield
Client Need: After experiencing significant fluctuations in corn yield, a large producer in Western Europe wants to cover the financial risk posed by a drop in yield jeopardizing its ability to meet key delivery contracts.
Pain Point: The climate-driven factors that lead to poor yield are diverse – excess of rainfall at a crucial moment for the seed germination, spring frost, repeated heat waves, droughts, etc. Taken together or individually, their effects are difficult to assess and insure independently.
Our solution: In close cooperation with the broker and the corn producer, Descartes designed a parametric yield protection fully adjusted to the client’s production schedule, revenue, and region. Our single yield protection covers the corn grower against the full spectrum of climate hazards impacting corn yield. Utilizing robust historical data on corn yield in combination with satellite imagery and advanced gridded weather models, we precisely model their risk to offer a more affordable solution than a peril-by-peril cover. .
The Result: At the end of the harvest season, the parametric cover will leverage official, transparent data on yield, and compare the results to the parametric structure that has been tailor-made for the corn producer. If yield data falls below the predefined threshold, the producer will receive payment of the corresponding percent of the Sum Insured within a matter of days.