
Pilot 3
Insurance services for agriculture
Pilot lead: BSC CNS
To support adaptation to climate change and variability through better climate risk management in agriculture, this pilot aims to co-develop a demand-driven, index-based insurance (IbI, also often called parametric insurance) solution that meets farmers' needs while ensuring viability for insurance providers. Collaborating with both farmers and insurers, we will demonstrate the potential application of IbI in diverse local contexts across the EU.
In the pilot’s first phase, we will focus on the Boreal
region in Finland, working with project partner
LocalTapiola, an insurance provider, to explore the
market potential and regulatory framework for IbI. In
support of developing IbI products, we will provide
indicators related to the weather phenomena impacting
crop production in the region.
Expanding to the Mediterranean region, we will closely
engage with ASAJA Jaén, a farmer association of olive
farmers in the Andalucía region of Spain, to understand
local needs and demand, among other potential
stakeholders. Through surveys, discussions, and analyses
of past climate impacts on crop yields, we will identify
the climate indicators relevant to olive production in
Andalucía, as well as the associated trigger and exit
thresholds for insurance payouts based on farmers'
self-reported past “bad” years. This would enable us to
derive such parameters as risk premium and payout
multiplier for the co-design of a tool to support IbI
products, to be showcased to insurance companies that
may be interested in introducing such products into the
Spanish market.
Finally, the pilot will explore scaling opportunities across the EU, refining the tools to ensure adaptability across diverse agricultural and climatic settings. The insights gained from both the Boreal and Mediterranean contexts will inform broader strategies for extending these innovative insurance solutions to other regions, supporting EU-wide agricultural resilience.