MOLDOVA: in the spring of 2022, the number and size of agroinsurance contracts dropped sharply
According to the information of brokers of insurance companies in Moldova, in the spring of 2022, the number and size of insurance contracts concluded by agricultural producers dropped sharply. Among the reasons, there is a decrease in industry profitability throughout the 2021-2022 season, as well as a sharp rise in the cost of all production resources in late 2021 and early 2022, EastFruit reports.
It is noted that in this situation, for insurance brokers and farmers when concluding insurance contracts for the current year, determination of prices for fruits of the future harvest becomes a problem, as the process are a guideline for calculating insurance premiums.
Insurers foresee an important change: if in previous years comprehensive insurance packages were popular among farmers, in 2022 farmers prefer to insure against each risk separately. At the same time, according to the insurance brokers, the number of large contracts concluded by regular customers has now sharply decreased, and the number of small contracts with new customers has increased.
According to the National Financial Market Commission of the Republic of Moldova, last year compared to the previous year, total GWP under agroinsurance contracts increased by about 400%. The main role in this was played by increasing (up to 70%) state subsidies in insurance premiums, expansion of the list of subsidized risks (including risks from price reduction due to a drop in crop quality caused by weather conditions) as well as psychological impact of the consequences of a poor harvest in 2020.
Author: Marina MAGNAVAL
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