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The volume of indemnities paid by insurers working in the agricultural sector in the country increased by 87% in 2016, according to data from the Superintendency of Private Insurance (Susep) provided by the National Federation of General Insurance (Fenaseg). The premiums surpassed the mark of R $ 1.3 billion in 2016, against the R $ 700 million recorded in 2015. Reason: crop failures due to climatic adversities caused by the El Niño climate phenomenon. Agricultural insurance covers damages due to climatic events such as hail, frost, excessive rain, high winds, fires, lightning, drought, flood or non-germination by external factors (with the exception of pests or diseases). For the rural producer to be indemnified, it is necessary to lose the harvest (total or partial). However, the international market already works with a more aggressive product than the rural insurance and that does not depend on the occurrence of a claim for indemnification to the insured. This is called Parametric or Parametrized Insurance, a product that works through the stipulation of linked indices to climatic phenomena, rather than objective assessments of the losses suffered, to calculate the payment of indemnities. It is aimed at sectors of the economy that have revenues and operating costs directly impacted by unexpected changes in the climate, such as renewable energy generation companies and large agribusiness players affected by rainfall, wind, sun and temperature. “This product does not depend on the materialization of a claim for the effective indemnification. It works as follows: a range is established in the indices to be stipulated (be it sunlight incidence, rainfall index, wind speed velocity range, etc.) and, if variations occur outside this range, the insured is indemnified. That is, if it rains less and a plantation does not produce the expected, the insured will be entitled to compensation in a much more efficient way, since what is covered is the loss of productivity and not the loss due to drought or excess rain) , explains Caio Timbó, director of LTSeg, a brokerage firm specializing in insurance and risk assessment and responsible for managing various insurance policies for rural producers. “The same parallel can be traced to a turbine or wind farm, where a wind “X”, and being lower, less electricity is generated and less profits in the operation “, continues TimbóFor the implementation of parametric insurance is necessary to adopt a more sophisticated methodology of risk analysis. “In this context enters the expertise and experience of the broker, who has the role of customizing the product according to the profile of each client. It is up to the broker, along with the client, to analyze which climatic effects are impacting the cash flow, be it costs or revenue of the company, and how this affects the operation over time. It is also worth mentioning the expertise of the CIA Seguradora, since this product has a lot of know how of experiences lived in international markets, and the companies that market it are very restricted and almost always using capabilities based on reinsurance “, says Caio Timbó. of the LTSeg emphasizes that one of the main advantages offered by this type of coverage is that it is not necessary to evaluate the damages by experts, facilitating the process of regulation of occurrences. “If the index agreed between the parties is reached, the policy is activated. Thus, the indemnity can be used by the company to reestablish its cash flow and finance measures of reaction of its business. Therefore, the contracting of the parametric is efficient for the companies “, finalizes Timbó.
Fonte: RPA News
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