Insurance companies are reporting growing interest in agricultural and property insurance, and some of the factors driving this interest are valid for both types of policies. Among them are climate change, the increasing risk of damage, the growing frequency of natural disasters, and the rising losses suffered by agricultural producers and households, commented Nina Kolchakova, CEO of the Bulgarian Insurance Association (ABZ), in an interview with Radio Veliko Tarnovo.
“More and more people are beginning to realize the risk their property is exposed to and that they are responsible for it, cannot rely on the state, and must take measures to protect their production or personal property”, explained Nina Kolchakova. The trend of increasing damage and losses, and along with it the awareness of this risk, is boosting interest in insurance.
In agriculture, there is another very important factor driving interest – the program of the Ministry of Agriculture and Food, which started this year and represents a new support scheme for insurance, funded by the EU. Under this scheme, obtaining insurance support is much easier compared to the old one. An important factor for the increased interest is the increase in the insurance premium supported by the scheme – it is now 70%. “Thus, if a farmer wishes to insure their farm, they can first receive a larger part of the premium as a subsidy, and second – they can receive it much more easily, with far fewer administrative requirements and a simplified procedure. We are already seeing how this affects interest”, said Nina Kolchakova. The increase in insured areas has a positive impact both on the economy and on the well-being of agricultural producers.
Among the most common risks for farmers are damages caused by hail. Nina Kolchakova reassured that this risk is included in all agricultural insurance policies. According to farmers’ assessment of possible risks, additional coverages such as protection against floods and fires can be added. Early spring frosts and drought, from which many producers suffer, are risks that in insurance are considered catastrophic, i.e. it is almost certain that they will occur. They can be insured, but the price of the policy would be very high. Insurances usually cover risks from random events, but when it comes to an almost certain event for which one will pay, then the price also rises.
In such cases, in other countries, public-private partnerships are organized – pools in which the state also participates. “In this way, the premium is reduced to levels bearable for agricultural producers who want to be insured,” explained Nina Kolchakova. Unfortunately, in Bulgaria, there is no such state policy, and insurers cannot bear the entire risk because they would go bankrupt.
There are various forms under which this problem can be solved, and one of them is compulsory insurance, which distributes the risk among absolutely everyone and allows enough premiums to be collected to cover payments without problems even in the event of a catastrophic event. At present, insurers cover payments only with the funds they collect themselves, and in the event of major risks, Bulgarian insurance can hardly provide full coverage.
-370x270-3.png "News image")
-370x270-1.png "News image")
 (002)-370x270-2.jpg "News image")
