Following freezing cold temperatures and frost across Western Europe during 2017’s critical spring growing period, Lloyds Coverholder Meteo Protect confirms a dramatic increase in France’s winemakers subscribing to parametric weather insurance in its second year offering. May 31st saw a conclusion to its spring frost risk coverage, which saw a 15 fold increase in viticulturists subscribing, and the same increase in the number of brokers in France adding the coverage to their portfolio.
In 2017, episodes of spring frost affected almost every French vineyard. The country’s largest prime wine-growing region of Bordeaux saw a drop in output of 40%, and France’s overall output was 17% less than the average over the past five years.
France’s brokers may access a dedicated weather insurance platform providing fully customized parametric weather insurance designed and managed by Meteo Protect, in order to help growers increase their resiliency against climate-related risks. During the spring months, these include the financial consequences of frost severely damaging or even killing the grape buds, and the vines’ growing cycle being interrupted during a period of intense vulnerability to cold temperatures, leading to a decrease in productivity.
“We have seen an increased demand from France’s wine growers for weather insurance following last year’s spring frost in the region,” says Gabriel Gross, CEO of Meteo Protect. “France experienced significant crop damage resulting from frost last spring, for which all insured growers who suffered losses were compensated. In fact, we have seen a dramatic increase in the number of growers subscribing for parametric weather insurance and brokers who now offer our solutions to their clients. We are now looking to increase the number of cooperatives who offer parametric insurance to their members. In addition, parametric insurance protects the cooperative from input shortfall or volume or price fluctuations.”
Wine is produced in 80 French departments, amounting to 47,9 million hectolitres harvested in 2015 generating revenues averaging 90,91 euro per hectolitre. It is one of France’s biggest exports. However, it is also a highly weather sensitive crop, with 10% of wine production lost to natural hazards every year.
Traditional insurance is not well adapted to the needs of wine growers, with expensive premiums and excessively high deductibles.
Yet, only 15% of vineyards are insured. Indeed, traditional insurance is not well adapted to the needs of wine growers, with expensive premiums and excessively high deductibles. Vineyards are particularly sensitive to weather anomalies with a spring frost on vines leading to significant or even entire crop losses if vegetation has already started. With global warming, the vines tend to break up earlier and earlier, which makes them more sensitive to spring frost in recent years.
Meteo Protects provides winemakers with fully customized insurance for any weather-related risk. Growers select their policy specifications, including geolocation, coverage period, and weather parameters. Parametric weather insurance is designed to compensate the losses incurred through adverse weather conditions. Unlike traditional insurance, indemnification is simple and automatic, requiring no field loss assessment, deductible or adjustment. Meteo Protect’s parametric weather insurance is available for all crops and in all regions.
Photo credits: Christian Hartmann, Reuters