LATVIA: crop insurance more affordable for farmers

Regulation on state support for insurers to provide compensation in case of drought damage has been approved in Latvia. It will contribute to the development of agro insurance, according to the Latvian Association of Insurers.

The association believes that this will make insurance more affordable for farmers. "Last year the need to insure crops against drought loss was especially high, and unfortunately, such insurance was not available in Latvia. We are pleased that we have managed to create a plan that will make this insurance type interesting for both insurers and farmers, i.e. making it easier for insurers to offer and for farmers to buy", said Janis ABASINS, the President of the association.

According to the association, in 2018, some insurers measured farmer demands for crop insurance to be almost three times its previous strength due to adverse weather conditions. Meanwhile, insurance against drought was not part of the covered risks and was possible only in the case of partial state support, since this risk involves destruction of a large territory and high costs for insurers.

The plan is for insurers to be able to make claims, which exceed the total insurance premiums paid by farmers, by more than 250% in the current year and in previous years, and does not exceed 60% of the total amount of losses. Similarly, the total amount of state compensation to insurers for one year will not exceed 1,500% of the total premiums paid in the current year.

For the Ministry of Agriculture to get preliminary information on crop areas insured against drought and expected losses, insurers should submit data on crop areas insured against drought risk and the size of calculated insurance coverage to the ministry by July 15, 2019.



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