View this article online: https://www.insurancejournal.com/news/international/2018/11/15/509243.htm
JBA Risk Management (JBA), the UK-based modeling firm, has launched an India crop catastrophe model for the re/insurance market.
More commonly known for flood maps and models, JBA collaborated with Chaucer through its office in Singapore to develop this probabilistic crop model for the Indian agriculture insurance market.
“The Indian agricultural insurance market has grown rapidly since 2015 due to the state sponsorship of a revised insurance scheme,” said Tom Graham, head of Regional Treaty Development at Chaucer in Singapore.
“The Indian government has publicly stated that it is looking to ensure cover for 50 percent of India’s 130 million farmers by 2020 through the Pradhan Mantri Fasal Bima Yojana (PMFBY) Scheme,” he added. PMFBY is a government-sponsored crop insurance scheme.
“To facilitate and support this vital and ambitious goal, it is hugely important to have robust models in place to help assess the nature of the risk and exposure to the market,” he said. “Collaborating with JBA ensured we combined Chaucer’s underwriting expertise with JBA’s leading modeling capability.”
In developing the model, JBA research highlighted the potential susceptibility of particular crop types to positive El Niño phases, JBA said, noting that there is increasing evidence that a period of El Niño weather patterns will likely prevail in the Northern Hemisphere from late 2018 into 2019. JBA found that some crops grown in many Indian districts during El Niño years may be subject to a 28 percent fall from their annual average.
“There’s currently a 70 percent chance that the global climate will experience an El Niño warming phase from October this year into early 2019,” commented Dr. Iain Willis, managing director of JBA Risk Management Singapore, quoting a report on El Niño from the National Oceanic and Atmospheric Administration (NOAA).
“We know that El Niño can have substantial effects on the rainfall patterns of the Indian summer monsoon. Physical crop simulations that we’ve analyzed using historic climate data suggest that some major Indian rainfed crops, including soybean and groundnut, are particularly vulnerable to these changes during El Niño years and can be adversely affected,” Willis continued.
JBA said its India crop catastrophe model makes use of the latest developments in agricultural technology software and utilizes computer simulations to reproduce the daily growth of major insured crops throughout the Indian summer and winter growing seasons.
Source: JBA Risk Management