Мore agricultural producers are insuring their crops, and the increasing frequency of natural disasters is among the main reasons for the growing interest in agricultural insurance, commented Nina Kolchakova, Secretary General of the Association of Bulgarian Insurers (ABZ), in an interview for Bulgarian National Radio -Stara Zagora.
Hail remains one of the most serious risksfor agricultural crops and is included in the basic coverage of all agricultural insurance policies. Although there is no official statistic on the share of insured areas, data from insurance companies show a noticeable increase in interest over the past year, with some companies reporting an increase of 60–70%.
A few years ago insured crops were just between 6 and 10% of arable lands. Today, expert estimates indicate that this share is around 15–16%, and according to some assessments, it is approaching 20%. This trend coincides with increasing trust in the insurance sector,as recorded in the latest national representative survey.
The growing interest is due both to the more frequent natural disasters and to the greater state support. Since last year, under a European program administered by the State Fund "Agriculture", 70% of the insurance premium is subsidized, and the procedure for receiving the aid has been significantly simplified. "We see that with the subsidy from the State Fund “Agriculture”, interest in insurance has increased significantly, and it is obviously an effective policy", commented Nina Kolchakova.
Despite the positive trend, Bulgaria remains among the countries with low insurance penetration in agriculture. In many European countries almost all of the agricultural land is insured, while in Bulgaria the potential for the development of this type of insurance remains significant.
Climate change poses new challenges to agricultural insurance across Europe. In countries with high insurance coverage, public-private partnerships to cover catastrophic risks are increasingly being discussed publicly, as the consequences of natural disasters are becoming more severe and increasingly difficult for the insurance sector to bear alone.
In Bulgaria, the insurance market has the capacity to cover existing risks, but drought and early spring frosts require different solutions. They are risks with very high frequency and scale of damage, which makes offering purely market-based insurance products practically impossible. ABZ is working jointly with state institutions to find solutions that will provide protection against these risks as well.
Along with financial incentives, a better awareness of agricultural producers is also an important factor for market development. Clear presentation of the covered risks and the insurance conditions helps customers' expectations to match the protection provided by the chosen product.
Kolchakova also drew attention to the need for insurance to be used more actively as a risk management tool. At present, a significant part of the consequences of natural disasters continues to be borne by the agricultural producers themselves and by the state. Bulgaria has a stable, well-regulated, and financially sustainable insurance sector, which can play an even greater role in mitigating the economic consequences of climate risks.
-370x270-3.png "News image")
 (002)-370x270-2.jpg "News image")
