According to a recent report published by Allied Market Research, titled, “Crop Insurance Market by Coverage and Distribution Channel: Opportunity Analysis and Industry Forecast, 2020-2027,” the global market was valued at $34.05 billion in 2019, and the crop insurance market size is projected to reach $53.02 billion by 2027, growing at a CAGR of 6.1% from 2020 to 2027.
Crop insurance provides protection against loss of crops due to natural disasters, such as floods, hail, drought, and other such unprecedented events, to several farmers and crop producers in the market. Primarily, crop-hail insurance and multi-peril crop insurance are the two major types of coverage available in the crop insurance market. In addition, crop insurance providers are implementing several advanced technologies such as satellite, Internet of Things (IoT), drones, and artificial intelligence to expand their existing offerings and provide customized crop coverage.
Furthermore, crop insurers provide a value to low-income farmers & their communities, both by protecting unexpected loss occurred and by encouraging significant investment in crops. However, consumers face several challenges such as low awareness toward premium of crop insurance and delay in processes of claim settlements, while dealing with crop insurance.
On the basis of coverage, the multi-peril crop insurance (MPCI) segment dominated the crop insurance market share in 2019 and is projected to maintain its dominance during the forecast period. This is attributed to the fact that MPCI offers a combination product in addition to the perils covered by the standard loss of yield coverage under crop insurance policy.
By distribution channel, the direct sale from insurance companies dominated the crop insurance industry in 2019, and is projected to continue this trend during the forecast period. As it explores new avenues of innovative & attractive range of distribution techniques and leveraging multiple channels for distributing its crop insurance services to target customer segments in the market. Furthermore, crop insurance providers under this segment have multiple tie-ups with agents, broker, online travel agents (OTAs), banks, and others.
The global crop insurance market growth was dominated by North America in 2019, and is expected to maintain this trend during the forecast period. This is attributed to the fact that farmers & ranchers in the U.S. strive to sustain and enhance economical crop production by availing prominent crop insurance coverage. In addition, insurers are developing existing offerings & providing knowledge to agricultural producers to enhance maximum safety of food & fiber crops for consumption in the region.
The crop insurance industry has experienced decline in growth, owing to complete lockdown across the world. In addition, farm economy is witnessing a negative impact and thereby stagnating the crop harvest in several countries, which is declining the growth rate of crop insurance coverage. Furthermore, the crop insurance market size is expected to recover from mid-2021, owing to factors such improvement in the global economy, implementation of several guidelines by the government to overcome the negative impact, and development in existing crop insurance policies.
Key Findings Of The Study
- By coverage, the multi-peril crop insurance (MPCI) segment led the crop insurance market share, in terms of revenue in 2019.
- Depending on distribution channel, the insurance companies segment garnered the highest market share in 2019.
- U.S. generated the highest revenue in 2019.
The key players profiled in the crop insurance market report include Agriculture Insurance Company of India Limited (AIC), American Financial Group, Inc., Chubb, Fairfax Financial Holdings Limited, ICICI Lombard General Insurance Company Limited, PICC, QBE Insurance Group Limited, Sompo International Holdings Ltd, Tokio Marine HCC, and Zurich. These players have adopted various strategies to increase their market penetration and strengthen their foothold in the industry.