XPRIMM: What are, in your opinion, the main reasons for which a very large proportion of the agricultural production is not insured?
Hans FEYEN: Often the local knowledge to set-up insurance schemes and to define insurance products is not available. In other occasions, the government is providing ex-post disaster relief to farmers rather than pushing for an ex-ante risk financing trough insurance products. Budget to provide insurance premium subsidies, as provided in most developed countries, is often not available.

XPRIMM: How much can help technology reducing the insurance gap? May digitalization be the driver?
Hans FEYEN: Technology and digitization are the most important drivers to close the protection gap for agriculture in developing countries. Technology often allows farmers to get an easy access to parametric insurance products, e.g via mobile phones. By using satellite images and high resolution weather data, it is possible to build insurance products that provide an appropriate cover against yield drops.

As in developing countries agriculture is often small-scale, it needs technology to design and sell insurance products in an efficient way.

XPRIMM: Climate change is definitely challenging for the agricultural sector. How is agricultural insurance adapting to this trend and what solutions can it provide to support the farmers' financial security?
Hans FEYEN: Climate change is a steady process and allows insurance companies to adapt their products to cope with the increased volatility and severity of climatic events. It is as such crucial that regular product reviews are performed and necessary changes are implemented.

As an example: the wide-spread frost damages in Europe this spring were due to an unusual cold spell, but also due to the early start of the vegetation period. The latter can be observed since about a decade, and is an element that should be considered in the insurance product design.

XPRIMM: In your opinion, which should be the best solution to reduce the agricultural insurance gap?
Hans FEYEN: In the end it all boils down to defining the right insurance product and service to the farmer. It has to work for the farmer, but also for the insurance company to be sustainable in the long term. Other elements like subsidies, insurance pools and limiting ex-post government payments will be supportive.