As of 2022, the number of farming households covered by agricultural insurance has grown to approximately 550,000, a significant increase from the only 64,000 households that were covered in 2010, reported Korean Re.

This growth has been driven largely by the government's agricultural and fishery disaster insurance scheme, which provides subsidised coverage for catastrophic risks and promotes financial stability within these industries.

Under the scheme, national and municipal governments provide a subsidy that can cover up to 90% of the insurance premium. This means that the out-of-pocket contribution required from the insurance buyer remains relatively low. Furthermore, the scheme also provides a 100% subsidy for all insurance operating expenses.

Only NongHyup Property & Casualty Insurance is authorised to offer subsidised crop insurance and sets premium rates in partnership with the government. 

Other insurers can participate as co-reinsurers, with the co-reinsurance panel ceding to Korean Re and then retroceding to foreign reinsurers. 

For livestock risks, NongHyup Property & Casualty Insurance, KB Insurance, DB Insurance, Hanwha General Insurance, and Hyundai Marine & Fire Insurance write policies directly.

“Among farmers, there has been a rising need for risk management through insurance programs amid the increasing frequency and severity of extreme weather events driven by climate change,” said Korean Re.

Crop insurance market jumped nearly half last year versus the 13.6% seen in 2010. Meanwhile, the share of farmers purchasing livestock insurance reached 94.6% last year, compared to 53.1% in 2010.

Early this year, the Ministry of Agriculture, Food and Rural Affairs declared measures to better the agricultural insurance scheme to benefit the farming industry in spite of disasters and the road toward sustainability.

Source - Insurance Asia