Precision agriculture company Farmers Edge has plans to disrupt the crop insurance industry, announcing an agreement with global reinsurer PartnerRe on Tuesday.
The four-year deal will see Farmers Edge and PartnerRe jointly develop new agriculture insurance products based on field data that Farmers Edge already collects for agronomic reasons.
“For the longest time we’ve been working on getting farmers’ data and utilizing the data in order to make decisions agronomically. What we’ve realized is data is really important for other verticals in the space. One that we identified really early was crop insurance,” explains Wade Barnes, co-founder and CEO of Winnipeg-based Farmers Edge, in the interview below.
Rather than waiting to receive a seeded acreage report weeks after a crop has been planted, an insurance company could receive that information in real-time, he notes. Premiums or coverage could be customized based on reporting throughout the growing season, whether it’s vegetative growth data via satellite imagery or extreme weather information collected by in-field weather stations. By communicating relevant data in real-time to an insurer, costs can be cut from the current approach to insurance, says Barnes.
There could also be a new level of automation introduced to filing and adjusting for claims, he says.
“It’s been this story we’ve been preaching, that this data is going to be worth something to you someday. I think people thought ‘we’ll all get paid for it,’ but I think you’re going to get paid for it in a different way,” says Barnes. “You’re going to get paid for it by utilizing the data to make the right decisions, but you’ll also get better insurance products, maybe better lending products, maybe market your grain better. That sounds way better than getting a couple bucks an acre.”
“We are delighted to be at the forefront of this exciting and innovative new initiative with Farmers Edge and look forward to partnering with our insurance clients to bring it to market.” — Emmanuel Clarke, president and CEO of PartnerRe
Real-time field data gives insurers an opportunity “to get closer to their customers in terms of risk selection, product design, crop growth monitoring and claims adjustment – to create very tailored solutions that meet each farmer’s specific needs,” adds Rinat Bektleuov, PartnerRe’s head of agriculture.
While the arrangement between Farmers Edge and PartnerRe is global in scope, Barnes says they will be focusing on North America, Latin America, Australia and Eastern Europe, rolling out these new products in the next year or two.
“Our view is in North America there’s a tremendous opportunity to create products over and above what farmers already have to give them better protection, and then in emerging markets globally where they don’t have crop insurance, this is going to help farms actually get insurance that they’ve never had before,” he says.
Listen to Shaun Haney’s conversation with Wade Barnes about Farmers Edge’s entrance into the world of insurance, here: