Data Science Strengthens ‘Traditional’ Crop Insurance, Mitigating Food Price Volatility
Per the Swiss Re Institute, crop supply shocks caused food prices to soar by 41% in 2021 and 34% in 2022. The SRI Crop Insurance Resilience Index (Crop I-RI) recently revealed that approximately 60% of insurable crops remained unprotected by insurance in 2022, representing a $113B protection global gap in insurance premium equivalent terms.
Public-private partnership-led crop resilience measures, coupled with improved, expanded insurance innovations, will address such volatility while lowering food insecurity. Yet, given ‘standard’ crop insurance’s recent economics and past criticisms, a clear case can be made for the need to empower said risk management tool through leveraging progressive InsurTech via AI, machine learning, natural language processing, Web 3.0/blockchain security and Internet-of-Things connectivity, among other means. Not just ‘traditional’ crop insurance, but evolving price volatility protection coverage will be augmented through AI, thereby fulfilling the very macro-fiscal institutional support urged by the IMF itself earlier this year for addressing price volatility’s effects on food vulnerability.