Lockton Re & Verisk: Revolutionizing U.S. Crop Insurance
Wednesday, Nov 20, 2024 3:23 am ET
1min read In the dynamic world of insurance, innovation is the key to staying ahead. Lockton Re, a leading global reinsurance broker, has taken a significant step in this direction by partnering with Verisk, a top data analytics and technology provider. Together, they aim to develop new (re)insurance solutions using Verisk's U.S. agricultural risk modeling solutions. Let's delve into this strategic collaboration and explore its implications for the U.S. crop insurance market.
Firstly, let's address the elephant in the room: climate change. Its impact on crop production and potential insured losses is undeniable. To tackle this challenge, Lockton Re will leverage Verisk's Multiple Peril Crop Insurance (MPCI) and Crop Hail Model. These models simulate hailstorms based on 10,000-year stochastic event catalogs, providing a comprehensive, scientific, and stochastic view of risks facing the U.S. crop industry today.
By incorporating advanced climate data and understanding the global impact of El Niño–Southern Oscillation (ENSO) on crop production, Lockton Re offers reinsurers a data-driven approach to risk transfer and product innovation. This collaboration marks a new chapter in crop insurance, driven by data, analytics, and a commitment to improving risk transfer solutions.
Verisk's crop models will support Lockton Re's development of new indexed products, designed to help (re)insurers address the increasing risks of a changing climate on agriculture production. These models provide the (re)insurance industry with a reliable solution to understand individual crop policy risks, optimizing designation alternatives and maximizing profit within risk tolerance levels.
The U.S. crop insurance market has seen significant growth in recent years, with indexed insurance products gaining market share. According to the National Crop Insurance Services (NCIS), parametric products accounted for as much as 12.4 percent of the MPCI premium in 2023 across the U.S., with even higher shares in key states. This trend is expected to continue, as insurers and reinsurers seek to mitigate risks and maximize profits in an increasingly volatile landscape.
In conclusion, the collaboration between Lockton Re and Verisk is a game-changer for the U.S. crop insurance market. By leveraging advanced data analytics and innovative risk modeling solutions, they aim to provide insurers and reinsurers with the tools and insights needed to navigate an increasingly volatile landscape. As climate change continues to impact crop yields globally, this collaboration marks a new era of data-driven, innovative risk management in the agricultural sector.
Firstly, let's address the elephant in the room: climate change. Its impact on crop production and potential insured losses is undeniable. To tackle this challenge, Lockton Re will leverage Verisk's Multiple Peril Crop Insurance (MPCI) and Crop Hail Model. These models simulate hailstorms based on 10,000-year stochastic event catalogs, providing a comprehensive, scientific, and stochastic view of risks facing the U.S. crop industry today.
By incorporating advanced climate data and understanding the global impact of El Niño–Southern Oscillation (ENSO) on crop production, Lockton Re offers reinsurers a data-driven approach to risk transfer and product innovation. This collaboration marks a new chapter in crop insurance, driven by data, analytics, and a commitment to improving risk transfer solutions.
Verisk's crop models will support Lockton Re's development of new indexed products, designed to help (re)insurers address the increasing risks of a changing climate on agriculture production. These models provide the (re)insurance industry with a reliable solution to understand individual crop policy risks, optimizing designation alternatives and maximizing profit within risk tolerance levels.
The U.S. crop insurance market has seen significant growth in recent years, with indexed insurance products gaining market share. According to the National Crop Insurance Services (NCIS), parametric products accounted for as much as 12.4 percent of the MPCI premium in 2023 across the U.S., with even higher shares in key states. This trend is expected to continue, as insurers and reinsurers seek to mitigate risks and maximize profits in an increasingly volatile landscape.
In conclusion, the collaboration between Lockton Re and Verisk is a game-changer for the U.S. crop insurance market. By leveraging advanced data analytics and innovative risk modeling solutions, they aim to provide insurers and reinsurers with the tools and insights needed to navigate an increasingly volatile landscape. As climate change continues to impact crop yields globally, this collaboration marks a new era of data-driven, innovative risk management in the agricultural sector.
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