Under the terms of the agreement, PartnerRe and Farmers Edge will jointly develop new agriculture insurance products aimed at addressing the specific needs and challenges of farmers in both developed and developing markets.
“The insights that we get from our data are helpful for growers to make decisions, but there’s a really important opportunity here. When the farmer gets more yield and lowers his costs – that risk management directly flows into the vertical around insurance,” Farmers Edge CEO Wade Barnes told AgFunderNews.
Farmers Edge is arguably one of the more established companies in the farm management software, sensing, and IoT field after first launching in Canada in 2005. The company installs weather station for every 2,500 acres it monitors and uses connected Farmers Edge sensors — dubbed the CanPlug — to farm machinery as well as integrating satellite imagery through an exclusive partnership with Planet Labs.
For farmers in developed crop insurance markets, this partnership may mean customized products that focus on revenue over cost. But, in developing markets, where PartnerRe has a strong presence, it could mean new access to insurance where little or none exists.
“Crop insurance in the US and Canada has enabled farmers to take risks and then go out and get loans. Emerging markets like Brazil don’t have that. As Brazil started to advance in agriculture, farmers had trouble getting financing because they have no insurance and the reason they can’t get insurance is because they have no data set,” explained Barnes. Data, he said, could advance emerging markets like South America, Eastern Europe, and Africa very quickly. “When they have better coverage, you’re gonna see farmers take more risk.”
Barnes said that these insurance products in emerging markets will likely be available after just one year of using Farmer’s Edge.
PartnerRe is a global reinsurer with a $5.4 billion market cap backing nearly every conceivable insurance category from agriculture and aviation and space to energy operations, life and health insurance. The company has offices in 14 countries. In agriculture, PartnerRe currently backs multi-peril crop insurance, crop hail, aquaculture, forestry, and livestock among others. Barnes said that the partnership is an endorsement of Farmers Edge’s data quality.
Rinat Bektleuov, Head of Agriculture at PartnerRe, said, “In recent years, precision farming has moved from a niche business to the mainstream as a stand-alone agritech industry, with great potential to become the new standard in crop production in the mid to long term. By marrying cutting-edge technology with insurance market expertise, insurers will have a unique opportunity to get closer to their customers in terms of risk selection, product design, crop growth monitoring and claims adjustment – to create very tailored solutions that meet each farmer’s specific needs.”
Though this is likely the first time a reinsurer is officially accepting data from a digital agronomy player as a basis for insurance products, Farmers Edge is not the first agtech startup getting into insurance.
Last year Crop Pro Insurance, which is based in Des Moine, Iowa, received approval from the USDA to sell crop insurance, making it the newest player in a very small club of only 16 approved providers.
As well as offering typical crop insurance coverage for weather, pests, flooding, and price fluctuations, Cro Pro, which claims to be the first VC-backed insurer to be approved to offer federally-backed policies, aims to promote agtech adoption through unique private, agtech insurance products. So, if a farmer decides to try a new biological yield enhancement product, for example, and purchases a policy on it from Crop Pro, the farmer can make a claim and recoup some of the investment if the product doesn’t work as the manufacturer forecasts.
Furthermore, In 2016, American Farm Bureau Insurance Services partnered with Granular, the farm management software startup purchased by Dupont last year. The partnership sought to streamline the crop insurance data collection and reporting processes for agents and their customers.