AXA Climate, the parametric specialist risk transfer unit of global insurance and reinsurance company AXA, has partnered with Dutch satellite technology firm VanderSat on a range of products to enable drought and soil moisture related exposures to be hedged.
AXA Climate will utilise data sourced from VanderSat’s microwave data from satellites to derive triggers linked to soil moisture levels, enabling parametric insurance or reinsurance products to be developed.
The initial product offering will be a satellite data-driven parametric insurance cover against drought-related losses. But the data also allows measurement of excess water levels as well, which could also provide triggers for agricultural interests that are exposed to high soil moisture levels.
With moisture a direct indicator of the water levels available for growing crops, so linked to yield volatility, the use of high-precision microwave technology measuring soil moisture can help to protect individual field zones against growing variability.
AXA Climate has integrated the satellite data from VanderSat to offer customers a parametric insurance product to hedge drought and soil moisture excess.
The parametric coverage is seen as an adjustable and transparent insurance product, with rapid payouts possible to help support the business continuity of those operating in the agricultural sector.
AXA Climate uses VanderSat’s satellite monitoring in order to trigger insurance payouts as soon as the soil moisture index falls below a certain level, or reaches above it.
It means no costly loss adjustment in the field so that payouts can quickly reach impacted clients.
By using satellite sensing data, the parametric insurance can be made available worldwide for anyone in the agribusiness supply chain that bears exposure to soil moisture levels, including input suppliers, processors and cooperatives, the company said.
“Technological advancements are at the core of our business,” explained Antoine Denoix, CEO of AXA Climate. “Integration of VanderSat’s satellite data into our product offering will allow us to make claims’ processing much faster and smoother for our clients.”
VanderSat’s satellite data is collected daily for every field around the globe at a spatial resolution of 100 x 100 meters, offering a unique and independent layer of information that can be used to construct a parametric insurance product.
Microwave sensing using satellites is seen as a more precise way to measure the moisture level of soils in fields across the world
“One major advantage of microwave sensing is that cloud cover does not interfere with the measurement from space,” added Richard de Jeu, founder and Chief Technology Officer of VanderSat. “We have been collecting daily information on soil moisture from different satellites for many years. As a result, we now have an archive of data that goes back to more than 18 years. These elements in combination with high-resolution sensing make AXA Climate’s satellite-derived products highly reliable for providing a flexible and cost-effective insurance policy to its customers.”
Our sister publication Reinsurance News reported last week that VanderSat announced a fundraise of several million euros to help further develop its patented satellite technology leveraged by global insurance and reinsurance companies.
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