The global crop insurance market is projected to grow by $14.82b, with a compound annual growth rate (CAGR) of 6.63% between 2022 and 2027. Asia Pacific is expected to contribute 31% of the market’s growth.

Key drivers for this expansion include the increasing frequency of extreme weather events linked to global warming. 

The US leads globally in crop insurance purchases, with federal programs such as the USDA’s Pandemic Cover Crop Program (PCCP) offering premium benefits of up to $5 per acre for eligible cover crops.

Extreme weather events like droughts, heavy rainfall, and wildfires have become more frequent, adversely affecting agricultural production worldwide. 

In the US, scientists have identified a strong link between climate change and these events, which has driven increased demand for crop insurance to mitigate financial losses. This is expected to bolster market growth during the forecast period.

However, low awareness of crop insurance, particularly amongst small farmers, poses a challenge. In many developing countries, crop insurance adoption remains low due to limited knowledge and access. 

Additionally, disparities in insurance claims, as seen in regions like Tamil Nadu, India, where claim payouts varied significantly across districts, may further impede adoption. These challenges are likely to affect the market’s growth trajectory during the forecast period.

Source - Insurance Asia