ESA contract extension for an EO agro-insurance platform

Tackling the challenges of the agricultural insurance industry

We're proud to announce that ESA has granted a contract extension for the EO4I project (Earth Observation for Agro-Insurance).

The ESA Earth Observation Best Practice for Agro-Insurance (EO4I) is a knowledge platform on the current geo-information requirements and needs of the agro-insurance sector. The platform highlights how exactly Earth observation services can provide state-of-the-art solutions and meet the challenges of agricultural insurance industry. 

The original project assembled a functionality for both, the Agro-Insurance and EO industry sector.
A best practice roadmap was established in 2020, highlighting how exactly remote sensing can help to tackle the challenges of agricultural insurance industry.

In the coming 12 months (2021) the project team (VITO, Geoville with support of Agroinsurance.com) will focus on following additional features:

• Address pushed shifts in technologies due to the COVID-19 pandemic and extend work with the agro-insurance companies
• Use cases for the 3 European insurance companies (Swiss Hail, Vereinigte Hagel & Austrian Hail Insurance) and two re-insurance companies (Munich Re, Swiss Re), with consideration of before mentioned technology shifts
• Extend cooperation from leading agricultural first insurances to reinsurances
• Elaborate potential additional stakeholders beyond the current ones

About EO and agro insurances

Agriculture provides essential social benefits: supply of food and commodities, economic development and employment. About 37% of Earth’s land surface is employed for agricultural purposes, about 11% of it used for growing crops and the other 26% for pasture. In turn, agriculture is under growing pressure arising from increased productivity requirements, soil erosion and sealing, water scarcity, effects of various natural hazards and weather extremes due to changes in climate patterns.

Earth Observation (EO) is a powerful technique used to continuously provide geospatial information across the agricultural value chain, measure productivity and increase in efficiency of agriculture, identify sustainability of farming practices and strengthening the resilience of rural communities. Satellites can be applied to agriculture in several ways, initially as a means of estimating crop biomass and potential yields. Optical and radar sensors can provide an accurate picture of the acreage being cultivated, while also differentiating between crop types and determining their health and maturity. The latter ones can be used to discover and monitor impacts of extreme weather events on this sector.

Agricultural insurance is likely to have an increasing role as a risk management tool in arable crops, horticulture and livestock farming. Several common forms of insurance for the agricultural sector can be distinguished: indemnity-based, yield-based and index-based structures. Hail Insurance and the Multi-Peril Crop Insurance (MPCI) are often either indemnity based or yield based products.

Only in recent decades, new insurance solutions have been developed that do not only cover crop loss due to hail, but also protect against other natural hazards. Changes in climatic patterns increase yield losses due to higher frequency and severity of extreme natural events forces, which pushes the insurance sector to address the negative effects of more natural hazards covered by various insurance products.

Given this, the insurance sector has a significant emphasis on identifying, gathering and aggregating data and getting access to local to regional information, including history of losses due to effects and crop exposure to effects of relevant risks that could now be sourced from remote sensing and earth observation data. This is where VITO Remote Sensing comes into play.