- Two
digital tools for agricultural insurance
- 600+
survey responses from farmers
- 2023-2026
Implementation timeline
Solutions
The PIISA (piloting innovation insurance solutions for adaptation) project, funded under the EU Mission on Adaptation to Climate Change, aims to develop innovative insurance and risk-sharing solutions that encourage households, businesses and public authorities to adopt climate adaptation measures and strengthen resilience to climate-related hazards. The third pilot study of the project supports improved understanding of climate risks in agriculture by developing an index-based insurance tool that meets the needs of farmers most impacted by climate hazards across Europe, while also remaining viable for insurance providers.
- Co-designing parametric insurance (CoDepi) tool: The CoDepi participatory tool was developed as an application (app) to help insurers create index based insurance products that are commercially viable and useful for farmers. It was created for olive farmers in southern Spain to ensure that insurance products are in alignment with their needs and specific vulnerabilities. It aligns historical payouts with actual experiences of farmers on the ground, enabling researchers, insurers and the farmers themselves to define insurance trigger thresholds using climate data. CoDepi allows different configurations of its base index parameters, such as contract periods and climate thresholds, to be tested and their impact on historical payouts to be assessed.
- Seasonal forecasting climate service (Shiny): This tool provides farmers with access to forecasts of specific climate variables, expressed as probabilities of events. The forecasts use bias adjusted metrics to maximise accuracy.
Co-benefits
Economic
The aim of this PIISA case study is to provide farmers with improved financial resilience in the face of worsening climate hazards. This is done through facilitating their understanding and quantification of the relevant climate risks, enabling more targeted and potentially more affordable insurance structures. For insurers, the CoDepi tool supports better designed indices, which may increase uptake from end users due to increased trust in the system. Public authorities may also benefit, albeit indirectly, through a reduced need to provide emergency relief funds and payments.
Social
The tools were developed using highly inclusive co-design processes which prioritised those that are most impacted, i.e. the farmers themselves, through activities such as workshops and surveys. This process fostered increased collaboration and trust between the farmers and other stakeholders, such as insurers, researchers and agricultural organisations. This active involvement of end users maximises the relevance and usability of the solutions, while also increasing public awareness of climate risks in the context of regional agriculture. By doing so, the capacity of rural communities to engage with climate adaptation tools is increased, protecting their livelihoods.
Environmental
By providing more accurate information on seasonal climate changes and risks through the Shiny app, the solutions support more proactive and adaptive farm management under increasing climate stresses. Early awareness of hazards such as drought conditions can encourage more timely and efficient water use, which can, in the long term, protect local ecological systems.
Replicability
Scaling up climate insurance tools for farmers across Europe by providing valuable information on climate insurance and forecasting for the agricultural sector.
Best suited for
This model is best suited for regions with an agricultural sector that is highly vulnerable to climate impacts, such as drought and heat stress. It is particularly relevant for farmers, agricultural cooperatives, insurers and the public authorities within these regions that are seeking innovative ways to manage climate-related financial risks, where improved climate information and index-based insurance approaches can support informed decision-making.
Stakeholders' role
The model relies on collaboration among multiple stakeholders. Farmers were heavily involved in the design processes of both solutions, providing valuable information to ensure contextuality. Their inclusion was facilitated by farmers associations. Insurance companies were engaged to assess the viability of the models used, and research organisations helped develop associated methodologies.
Built-in scalable tools
The model uses tools designed with scalability in mind. The CoDepi tool can be replicated in other contexts since its methodological structure remains constant. Its base parameters must be adjusted to the agronomic, climatic and institutional characteristics of the target region. The Shiny app can be scaled thanks to the fact that the underlying datasets are global in terms of coverage. The tool can even be extended to sectors other than agriculture through the selection of the appropriate climate variables and indicators.
Funding pathways
The pilot case was developed through the Horizon Europe-funded PIISA project, as part of the EU Mission on Adaptation to Climate Change.
