For more on this part of the insurance industry:
1. visit our Farm Insurance page for a look at all products in this sector
2. or focus in on all of the crop insurance products available on IB Markets!
Crop insurance is a financial safety net for farmers and businesses that cultivate grains, fruits, vegetables, and other harvested plants against unforeseen losses. It covers incidents like:
The UK is looking at growing new crops like chickpeas, quinoa, and stone fruits to adapt to climate change. Crop insurance can help protect these new investments to make sure farms can grow and stay secure in the future.
In 2024, heavy rain and flooding in the UK damaged wheat and barley crops. These disasters caused big financial losses to many businesses.
Insured farmers recovered fast as they used payouts to replant and rebuild. But uninsured farmers struggled, and some had to stop farming completely.
The UK's spring barley crop is expected to increase in 2024, showing growth in the sector. Farmers are using AI and satellite technology to improve yields and reduce losses.
More farms are choosing combined insurance policies which create new opportunities for UK crop insurance brokers. But they must also be aware of emerging threats like:
delayed harvesting: warmer autumns extend the growing season, affecting feed supply planning
financial instability in farming: inflation and economic uncertainty are causing more farm insolvencies
blight outbreaks: rising temperatures and humidity increase fungal infections for potatoes
Brokers must adapt to rising claim volumes as floods and storms become more severe. Cyber threats are also increasing as farms use more digital tools.
Offering customised policies that cover both climate risks and cybersecurity will allow farmers to stay protected.
Crop insurance supports farmers in shielding their income when crops are damaged. Farmers pay a premium to an insurance provider for coverage.
If their crops are damaged by bad weather, pests, or other covered hazards, farmers can file a claim. The insurer pays compensation based on the policy to help farmers recover from losses.
Many farmers insure their crops to avoid major economic losses. Many elements can destroy harvests and reduce income.
Farmers can recover faster and keep their businesses running with insurance, even after unexpected setbacks.
Farm-combined insurance is the most common option. In one simple plan, this policy covers:
This helps farmers secure their business from multiple risks in one policy.
These policies help farmers customise their coverage to fit their needs.
Crop insurance has limitations and challenges that can affect farmers and insurers. These perils include high premiums, delayed payouts, and more.
While insurance for crops is useful, there are threats and drawbacks to consider. Common perils of this insurance include:
Farmers and brokers should review policies carefully to ensure the right coverage and avoid possible gaps.
Certain UK crops receive higher insurance payouts due to their economic value and vulnerability to risks. The four most insured crops are:
These are important to UK farming, so they are widely covered by crop insurance.
Saffron is considered the most expensive farm crop in the UK. This spice requires harvesting the stigmas of thousands of crocus flowers to produce a small quantity which makes it highly valuable.
Prices can reach around £2,500 per kilogram. Crop insurance can safeguard this crop as it is labour-intensive and requires precise growing conditions.
