According to data from the Association of Bulgarian Insurers (ABZ), the share of agricultural insurance in the non-life segment, which is already very small, has dropped four times - from 0.74% in March 2021 to only 0.19 % in March 2022.
GWP collected is only BGN 1.3 million (- 5.7% y-o-y)/~EUR 0.66 million. Moreover, this decline is combined with a strong growth of 85% in the paid claims as of March 2022, said Nina KOLTCHAKOVA, General Secretary of ABZ. This growth is explained by climate changes, which lead to extreme phenomena such as frequent and strong hail, drought and related fires.
"It's normal for claims to go up because of climate change. They're having an increasing impact through storms, hailstorms and similar phenomena that affect agriculture. So, claims are going up because the damage is going up all the time. That's no surprise to anyone", she explained.
Paradoxically, however, while risks are rising, agricultural insurance is declining. According to Nina KOLTCHAKOVA, it is difficult to give an exact and clear explanation for the reasons. Among them may be the widespread perception among farmers that insurance is expensive and rather an unnecessary expense, as they rely on the state support in the event of damage. The expectation that the state is obliged to compensate farmers also brings several problems. Producers often do not realize that the condition is that 100% of the crop has failed, and this is not always the case. There is no money to fully cover the losses, she explained.
There is also another negative effect in a purely economic aspect. Insurers distribute the risk among a smaller circle of agricultural producers, the price of insurance is accordingly higher. Research from two years ago shows that only 6% of the agricultural areas in our country are insured. Now this share is probably even lower, given the decline in premium income for this type of insurance, said General Secretary of ABZ.
*1 EUR = 1.96 BGN (01.04.2022)
BULGARIA: ABZ: the share of agroinsurance in non-life premiums dropped four times by March
9 August 2022 —
2307 views