A new resource hub empowers crop insurers and farmers to boost financial resilience to extreme weather
From extensive droughts across the Great Plains and back-to-back hurricanes damaging vegetable and citrus crops in the Southeast, the last two production seasons have demonstrated the intensifying damage of extreme weather on America’s farms. In 2023 alone, natural disasters caused nearly $22 billion in crop and rangeland losses. While crop insurance is a critical safety net for farmers, the growing impact of climate change underscores the need for proactive resilience strategies on the farm.
Recognizing this, Chubb and its crop insurance division Rain & Hail — the largest crop and agriculture insurance provider in the U.S. — has launched a new resource hub designed to equip farmers and crop insurance agents with essential tools, insights and advisors to increase on-farm resilience. Environmental Defense Fund Climate Corps fellow Carter Purcell led the development of the hub during her time at Chubb.
The new resource hub highlights the increasing need for comprehensive risk management solutions that not only protect farms financially in the short term, but also support long-term resilience.
Learn more about the relationship between crop insurance and resilience to extreme weather, and why it’s critical to provide solutions that support farmers’ short- and long-term financial resilience.
Crop insurance is a critical tool to keep farmers in business
Crop insurance is an essential risk management tool for farmers, shielding them from the devastating financial consequences of extreme weather. Research by Kansas State University, Cornell University and Environmental Defense Fund on the impact of extreme heat on farm financial performance underscores its importance: over the past few decades, farms in Kansas experienced a 66% reduction in net income for every 1.8°F (1°C) of warming. However, crop insurance enabled farmers to recover 51% of these losses.
The remaining 49% of unrecovered farm financial losses highlights a critical gap. Crop insurance allows farms to survive financially to farm another year, but it provides only partial relief. Successive extreme weather events degrade farms’ financial positions and make it difficult to remain economically viable.
Resilient farming practices can reduce risk from extreme weather events
Farmers can implement management practices to reduce their farms’ vulnerability to variable weather. Resilient farming practices are an essential complement to crop insurance because they reduce farms’ underlying production risks.
For example, improving soil health through practices, such as reducing tillage and planting cover crops, can improve soil’s ability to retain water during droughts and drain excess water during heavy rains. Research conducted by economists from the University of Illinois and University of Missouri, with support from the Meridian Institute, found that fields with cover crops and no-till management in the Upper Midwest were 24% less likely than conventional fields to be declared unplantable due to wet conditions in the spring of 2019, reducing the need for insurance payments.
Increased implementation of resilient farm management practices benefits both farmers and crop insurers by reducing production losses, as well as cumulative financial losses. Since crop insurance is subsidized by the federal government, resilient farming can also help reduce the program’s cost to taxpayers.
Research and innovation are critical to meet everchanging risk management needs on the farm
Agricultural risks are evolving rapidly, driven in large part by the increasing frequency and severity of extreme weather events. To meet evolving needs, crop insurance must evolve as well, incorporating innovative tools and practices that enhance farm resilience. This will require investments in research, increased data sharing and transparency, along with the use of innovative data like satellite imagery, the piloting of predictive models, and the alignment of insurance products and incentives for adaptation.
But most important for success will be clear communication and assistance to insurance agents and farmers to ensure that adaptive and flexible solutions reach farmers and improve their livelihoods.
Chubb’s new resource hub represents an important step toward connecting insurance services with assistance for long-term resilience. By fostering education and collaboration, the crop insurance system can better prepare farmers to navigate the uncertainties of a changing climate.
