AON Romania organized an event on parametric insurance dedicated to Romanian farmers

AON Romania, one of the global leaders in the insurance brokerage market, organized a strategic debate with farmers on agricultural insurance on Thursday, September 21st. The dialogue was open and constructive, focusing on risk management in agriculture and the traditional or innovative solutions available in the insurance market.

Farmers face multiple risks, including cost control, technical and economic expertise on the farm, volatility in inputs and production, as well as significant climate-related risks. Hence, the discussion revolved around the characteristics and benefits of traditional and parametric agricultural insurance.

Among the speakers were Eugen Anicescu, CEO of AON Romania, Cerasela Tudor, a senior expert in the Agriculture business line at AON, Florin Constantin, founder of AGXecutive, and representatives from major farmer associations and cooperatives.

Some of the key issues raised by Romanian farmers include the lack of agricultural policies, price fluctuations, difficulties in securing funds for equipment and technology investments, and the impact of climate change, including extreme temperature variations and precipitation that can affect crops.

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“Natural disasters, especially drought, caused economic losses of over 22 billion dollars in Europe last year, with only 3 billion dollars compensated. The low coverage level confirms that the increased recurrence of catastrophic events shows that economic sectors are not yet prepared for the new reality. Therefore, Aon’s role is to inform and provide consultancy to agricultural companies on the front lines of impact. We take on a crucial role in supporting farmers and protecting their crops. We remain dedicated to developing solutions that meet their needs and complement the current offerings”, said Eugen Anicescu, CEO of Aon Romania.

Farmers highlighted both positive aspects and areas for improvement in the solutions currently used for crop coverage. Easy access, digitalization, prompt compensation to farmers, low costs due to subsidies were some of the positive aspects mentioned. However, limited insurer interest, lack of flexibility, the need for a better understanding of contractual clauses, minimizing subjective factors in loss assessment, and the existence of uninsurable risks were among the elements for which farmers seek answers.

To address some of these needs, Aon discussed the existence of innovative solutions that can support farmers. Parametric agricultural insurance products are gaining ground in multiple regional and international markets. They complement traditional solutions and provide additional capacity, offering farmers financial stability in the face of losses caused by climatic factors and objective criteria for measuring compensation. Essentially, they help farmers preserve their capital and continue their operations despite unfavorable conditions. Moreover, they can supplement a traditional crop insurance policy and transparently present results through retrospective calculations, allowing data-driven decisions.

“These insurance products offer one of the most effective risk management approaches on the farm, including risks that may seem uninsurable. Although insurance is not well-known and adopted in Romania, AON, as an insurance broker, customizes the best solution for each farm. The current agricultural year has been one of the most challenging for farmers due to high costs, low production, and volatile market prices. Crucially, dialogue remains key, along with openness to understanding their characteristics and benefits. By including international insurers offering these solutions in the options available to Romanian farmers, their desire for a multitude of solutions and providers could be met”, emphasized Cerasela Tudor.

Participants in the event also mentioned that the current network of weather stations is insufficient and often inaccurate. The solution to this issue involves diversifying with other data sources obtained through satellite monitoring, improving the accuracy of compensation assessments.

During the event, representatives from the agricultural sector, including farmers and cooperative representatives from Teleorman, Dobrogea, Braila, Vrancea, and other key regions, were present. Additionally, representatives from institutions such as the Association of Corn Producers in Romania (APPR), the League of Agricultural Producers Associations in Romania (LAPAR), and the National Union of Branch Cooperatives in the Vegetable Sector (UNSCV) were also in attendance.