Climatic variability in Australia is high and presents a major challenge to farmers. Despite this, Australia has developed an efficient agricultural industry with a high degree of innovation and adaptability. This has occurred without Multi-Peril Crop Insurance (MPCI). There have been several attempts at introducing MPCI. To date, all of these have failed due to high levels of adverse selection. Several feasibility studies into MPCI have concluded that, to overcome adverse selection, a meaningful premium subsidy is required. No such subsidy has been forthcoming, and there is no indication that this will change. The federal government has decided to partly finance the one-time risk assessment costs for MPCI to the extent of AUD 2,500 per farmer, i.e. a total of AUD 20 million over four years. There has been a recent increase in MPCI activity in Australia, with five offerings available. Despite the growing number of offerings, take-up is limited. Premium rates are generally above 7%, adverse selection is high and take-up is low. It is most likely that the funding which has been announced will be spent in one go, with no ongoing benefit. This support will not reduce adverse selection. Satellite imagery, precision agriculture and crop models have the potential to play a critical role in reducing the cost of managing an MPCI and assisting in risk assessment. Development of MPCI without a premium subsidy will be difficult, and no path forward offers a guaranteed result. However, if a small portion of the current AUD 20 million commitment was made available for research and development with a focus on enabling technologies, the probability of developing a sustainable product would be enhanced. Source - Munich Re