Drought insurance by Wetterheld, explained to Agritechnica visitors by our CEO Nikolaus Haufler
After excited reports in the Agrarzeitung and agrarheute about our innovative Drought Insurance offering, we experienced a permanent flow of visitors at the Wetterheld booth at the world’s largest agricultural fair, Agritechnica. We were talking all the time, and we met amazing farmers with the many different types of produce and business:
- agricultural consultants
- agricultural contractors
- asparagus
- blueberries
- corn
- forest
- grassland
- honey
- Jerusalem artichoke
- malting barley
- potato processors
- potatoes
- pumpkin
- rape
- raspberries
- spring barley
- spring rape
- spring rye
- strawberries
- sugar beet
- winter barley
- winter rape
- winter rye
- winter wheat
This is what we learned:
- Farmers think that drought insurance is expensive
- Farmers think that drought insurance is not flexible
- Farmers do not trust the insurer’s claim managers
These are our answers:
An inexpensive drought insurance is possible and needed
We want to insure entrepreneurs like restaurant owners and festival event organizers against rain, and farmers against drought. This will allow us to build an insurance portfolio which is unique in Germany and which makes inexpensive premiums possible for both sides. We had to explain this simple principle in every single encounter to convince farmers that it is indeed possible to build an inexpensive drought insurance. It’s not just possible, we will also do it!
A flexible drought insurance is possible, and we proved that
The famous big agricultural insurance companies like to offer drought insurance with a fixed start and end date. There is a big flaw: scientific studies have shown that cumulated precipitation amounts in fixed time windows have no statistical relationship with agricultural yields. This means there is a high risk of not receiving a payout in cases where drought damage has hit the farmer (“basis risk”).
The Wetterheld drought insurance is different:
- Contracts can be booked up to 14 days in advance, e.g. when the soil is dry around the end of March and a lack of rain in April would reduce yield.
- Contracts start and end at any given day to track the start and end oft the vegetation period correctly.
- Contracts don’t just sum up the precipitation amount of a period but look at the rain on every single day. In some regions of Germany, we had a couple of extremely dry weeks in 2018 and 2019, after which up to 100(!) mm of rain came down on one single day from the skies. This helps the precipitation statistics, but it helps little on the field! This is why in our system, such an extreme rainy day leads to just a small reduction of the drought insurance payout.
A drought insurance without claim managers on the field is possible, and farmers trust it
Only two farmers that we met had anything positive to say about agricultural claim managers and their field visits. All other farmers had extremely low trust. We don’t want to judge ourselves, but the feedback from the market are really clear: a drought insurance without agricultural claim managers enjoys high trust among farmers. This is why we had very positive feedback about our Wetterheld drought insurance.
How do I get the Wetterheld drought insurance?
You can get our drought insurance here. Just choose time period, number of insured drought days, and a payout in Euro per drought day (dependent on expected losses in yield that you would like to insure). Fast, simple, online. And if you have any questions about our weather insurance app just drop us a mail: [email protected].
