Sompo Insurance: Thai farmers benefit from insurer’s innovative satellite weather index

Business Challenge

Agriculture is a critical Thai industry, but the effects of climate change make predictable harvests difficult. Longan, a fruit eaten raw or used in soups, desserts, and candies, is a leading Thai export (≈USD 4.9 billion annually). Sompo Insurance Thailand wanted to minimize farmers’ losses from weather-related crop damage. However, rainfall varies each season, and the firm sought to create a policy triggered by long-term drought.

Solution/Implementation

In cooperation with Thailand’s Bank for Agriculture and Agricultural Cooperatives (BAAC), Sompo Thailand piloted a first-of-its-kind coverage plan to protect longan farmers from devastating drought impact using a precipitation volume index. The policy pays indemnity to insured farmers when satellite data indicates low or below-drought index precipitation. Working with the Remote Sensing Technology Center of Japan (RESTEC), Sompo Insurance Thailand uses a Global Satellite Mapping of Precipitation (GSMaP) solution that provides hourly rain-rate data. Damage assessments are possible without in-person surveyors. Through Sompo Insurance Thailand’s collaboration with BAAC, the policy was made available for longan farmers in 24 districts in northern Thailand where longans are grown.

Results

The firm introduced longan farmers’ coverage under the direction of AgriSompo, Sompo International’s integrated platform to assist farmers, ranchers, farm suppliers, agriculture insurers, and agribusinesses in 2019. The launch allowed Sompo Insurance Thailand to hone its expertise in design services for weather index insurance, collect damage data, and relieve farmers of as many losses as possible. By 2021, Sompo Insurance Thailand expanded its parametric weather insurance to cover rice and sugar cane farmers. Today, Sompo Insurance Thailand combines local knowledge with technical support from AgriSompo to further support Thai agriculture