Government support is a key factor in the development of agricultural insurance.
Agricultural insurance in the United States has a long history. It started back in 1938. True, at that time, insurance was not widely used by farmers.
The situation began to change globally in the 90s of the last century, when state support came to the field of agricultural insurance.
At the moment it works like this:
Farmers (individuals) and companies in the agricultural sector enter into contracts with insurance companies.
The USDA, in turn, is a reinsurer for insurance companies. If the company’s revenue exceeds its cost of paying insurance premiums, then the company shares its profits with the Ministry of Agriculture. Otherwise, he helps her pay off the policyholders (subsidizes losses).
Thanks to this, insurance in the United States has developed to a very high level today. According to the US Department of Agriculture, at least 83% of crops are currently insured in the country.
At the same time, insurance in the USA is multi-risk. True, it does not apply to all crops. First of all, we are talking about wheat, corn, soybeans and cotton.
How is agricultural insurance developing in Russia?
The key to success here, too, is largely the support of the state .
“State-supported agricultural insurance remains the engine of growth in the agricultural risk insurance market in our country.
As follows from the data provided by the Bank of Russia, the agricultural insurance market grew by 36% in the first half of the year, while the subsidized insurance segment increased by 48% compared to the same period last year, «said President of the National Union of Agricultural Insurers Korney Bizhdov.
In general, for the period from January to June 2021, insurance premiums under all insurance contracts reached the amount of 4.6 billion rubles, of which 4.1 billion rubles — insurance with state support .
It is noteworthy that last year these figures were 3.4 and 2.8 billion rubles, respectively. Thus, we see significant growth.
A unique feature of Russia is that almost all insurance payments (4.5 billion out of 4.6 billion) were made to legal entities.
Private farmers were paid only 76 million rubles. That is, at the moment almost the entire agricultural sector in Russia is in the hands of medium and large enterprises.
Thus, insurance in the Russian agricultural sector is developing today. But how actively this process will go in the future largely depends on the state and its support.
