In the event of a natural disaster or a loss of 30% or more of crop value, insurance companies must verify, and adjust claims before paying them out. The process is lengthy and convoluted, beginning with sending a crop adjuster to inspect damage and analyze relevant data. During this time, farmers cannot replant new crops but must wait for their payouts, often resulting in significant losses for the farm.
Agricultural losses are generally regionally targeted, severe, and statistically more common than other losses, meaning that insurance companies often must respond to many claims at once, increasing the friction already inherent to the process.
Yet, farmers increasingly rely on crop insurance in the face of growing climate unpredictability. Crop insurance is a necessary component of the agricultural supply chain, and therefore it's of benefit to all stakeholders that the process is streamlined.
The below data demonstrates the importance and breadth of the crop insurance industry, taking New York state as a case study. In 2019 in New York -
Despite the relevance to the industry, crop insurance today holds challenges for all stakeholders.