Drought insurance to help farmers have more shields against climate change

On the afternoon of June 6, Hillridge Insurance Technology Company (Hillridge for short) coordinated with MSIG Insurance Vietnam Co., Ltd. (MSIG Vietnam for short) to organize a Signing Ceremony of Partnership Agreement and  Drought Insurance Launch. This is a product developed on the Hillridge platform and provided by MSIG Vietnam.

Mr. Dale Schilling, CEO of Hillridge, said that Hillridge is an insurance technology company that provides solutions to fill the insurance gap for weather-related risks in agriculture and industries vulnerably affected by climate change. The company designs and develops innovative technology-based solutions that enable farmers around the world to purchase insurance at a reasonable premium to respond to climate change, especially extreme weather events such as drought.

According to Mr. Dale Schilling, climate change causes higher fluctuations in revenues and expenses in the agriculture sector than in other industries. However, many farmers and producers are having difficulty accessing weather risk management tools.

In response to this challenge, Hillridge has developed a modern technology platform that integrates real-time weather data, advanced analytics, and risk modeling techniques. This platform allows the company to provide customized insurance solutions that meet the unique needs of farmers. By analyzing historical weather patterns, current data, and seasonal weather predictions, Hillridge accurately assesses the risks associated with drought and other climate factors, helping farmers make dependable decisions about their insurance purchases.

Hillridge ensures that all farmers, with large or small cultivation scales, are able to access this type of insurance. Hillridge's technology optimizes operations and reduces administrative expenses, contributing to providing insurance packages at more reasonable premium. This has removed previous barriers, helping farmers overcome difficulties when buying the necessary types of insurance.

"The impact of El Nino on the Vietnamese territory in 2023 plays a propelling element for us to quickly launch this product. The company's ambition is to equip Vietnamese farmers, whether cultivating on a large or small scale, with the tools and resources needed to reduce the financial risks associated with drought. At the same time, actively contribute to the sustainable development of Vietnam's agriculture sector," said Mr. Dale Schilling.

Ms. Nguyen Thi Lan Phuong, Deputy General Director of MSIG Vietnam, shared: MSIG Vietnam is a subsidiary of Mitsui Sumitomo Insurance Co., Ltd., belonging to MS&AD Insurance Group Holdings (MS&AD Holdings for short), one of the largest insurance groups in the world with a presence in 50 countries and regions around the globe. MS&AD is among the top non-life insurance groups based on total revenue.

Drought insurance is the first agricultural insurance product that MSIG Vietnam launches in Vietnam, in addition to the variety of products available such as personal accident, health care, travel, home, motor vehicle (for individuals), liability, and property (for businesses) insurances, etc.

According to Ms. Lan Phuong, in Vietnam, nearly 40% of the land area is used for agricultural purposes, and the agriculture sector accounts for nearly 13% of the total GDP. Therefore, drought insurance will be a reliable shield to help farmers protect their livelihoods and precious things. In addition, any agricultural business that is at risk of experiencing the impact of drought can use this insurance product.

Through the Hillridge-developed platform, farmers can directly get insurance quotes via the internet based on real data. The insurance policy value will be determined before the beginning of the insurance period, and people only have to pay when the policy’s conditions are met. This is how the platform simplifies every procedure between the insured and the insurance company.

The drought insurance product in the Vietnamese market is a continuation of the successful partnership between Hillridge and MSIG in the Australian market, where the two units have been coordinated since 2021. The cooperation aims to protect farmers from climate events affecting crops.

"Vietnam is one of the countries heavily impacted by climate change. Drought insurance will play an important role in the lives of Vietnamese farmers, as they need to protect their livelihoods against the weather fluctuations that are becoming more complicated and unpredictable", expected Ms. Nguyen Thi Lan Phuong.