Insurance and Climate Change column

Crop Of Climate Corps May Bloom in Ag Insurance Landscape

By | November 13, 2014

You can still shake your climate moneymaker.

Climate change certainly didn’t carry the day in the November elections. It shouldn’t be news to anyone that the topic ushered in few if any victories for those who had it high on their platforms, and the tens of millions of dollars targeted to defeat those perceived to be cool on climate change action turned out to be largely ineffectual in races across the country.

But climate change still has the potential to be a hot growth industry, and some would say it already is – at least based on the growing success of The Climate Corp.

The San Francisco, Calif.-based company, founded by two engineers formerly with Google Inc., in August reported that farmers working more than 50 million acres across the U.S. had taken up its Climate Basic service – that’s the company’s free web and mobile service that uses data science to help farmers make planting decisions with “field-level insights, from soil moisture levels, to crop growth stage, to current and future weather.”

The company was purchased last year for $930 million by St. Louis, Mo.-based Monsanto Co., the publicly traded multinational agrochemical and agricultural biotechnology firm that has been hammered for its genetically engineered crops by some of the same groups that support a more aggressive worldwide climate change agenda.

Monsanto announced a settlement today, though it did not admit liability, and agreed to pay $250,000 to U.S. wheat farmers who sued over market disruption after unapproved genetically engineered wheat was discovered growing in Oregon.

Operating as a managing general agent Climate Corp. works with roughly 300 independent agents around the nation and offers crop and hail multi-peril crop insurance policies through a multi-year carrier agreement with OneBeacon Insurance Group.

That’s one side of the operation. The other offers weather- and growing-related data to farmers through its free app and web service as well as through a variety of paid plans – Climate Pro, Precision Acre.

The products offer optimal planting dates, and advisories on nitrogen and on pests and disease and advice on when to harvest.

The science “consists of hyper-local weather monitoring, agronomic modeling and high resolution weather simulations,” the company states.

Possibly because it’s a Monsanto company, and therefore a bit media shy, the company was reluctant to say much about how the science behind its data works, nor would it provide information on how well the company has been doing in the past few months – a request for any such of information, even an a plea for an anecdotal “we’re getting a lot of calls lately” type of response, yielded only repeated references to an August news release about the bountiful take-up on its free Climate Basic service.

It’s also not so clear just how much the company does to prepare farmers for the impact of climate change other than arm them with better data to be prepared for the weather. There’s also it’s very catchy, hyper-climate-related name and website:

Joe Young, vice president of insurance operations, said the company isn’t trying to tell farmers about the impacts of climate change, but offer them local data on things like rainfall, dry spells, heatwaves, extreme weather – in other words the effects of a changing climate.

“We’re really trying to move the industry forward from more of a reliance on intuition to more of a reliance on data and data science,” Young said.

Further explaining the concept of the data they provide, Young said various sources of data are compiled, as well as data gathered by the company itself, and then they “build modeling capabilities that bring it down to a very tight, tight grid.”

He added, “We do 3 million daily weather observations across the United States. We have a unique perspective about how weather is impacting very particular pieces of this ground.”

There appear to be no solid figures out there on just how many climate change themed businesses have emerged in the last few years – or how many jobs have been created on the back of growing interest in that area – but with increasing interest in green bonds, ever larger investments in alternative energy and the amount of focus on climate change that’s being driven by the media and politics, it’s not hard imagine a large crop of Climate Corps soon blossoming in the agricultural insurance landscape.

“This market certainly is getting an awful lot of attention and increased opportunity,” Young said. “The weather impacts all of us. You certainly see a lot folks in the climate space from various angles and various points of view.”

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