Offering Insurance for Agricultural Sector and Initiatives for Climate Change Adaptation

Insurance Services for Agricultural Sector

"AgriSompo": Integrated Global Platform for Agriculture Insurance

Sompo International Holdings (SIH) is developing "AgriSompo", an integrated platform on the global market, and provides a wide range of insurance and reinsurance products to agriculture markets, mainly in North America, Europe, Brazil and Southeast Asia.

Utilizing "AgriSompo", SIH underwrites insurance for farmers, agri-businesses and agricultural insurers at a common standard, and provides expertise and technology for a range of products.

Providing the Weather Index Insurance in Southeast Asia

Weather index insurance is an insurance product that pays out a contractually predetermined insurance amount when a weather index – such as temperature, wind speed, rainfall–fulfills certain conditions.
Utilizing the risk assessment technology provided by Sompo Risk Management and rainfall data estimated using earth observation satellites belonging to the Remote Sensing Technology Center of Japan (RESTEC), our Group provides weather index insurance aimed at reducing agricultural business risks in Southeast Asia, where agriculture is a key industry that is vulnerable to climate change.

In 2010, we launched a weather index insurance for farmers in Northeast Thailand aiming at reducing their damages caused by drought. Sompo Insurance Thailand developed a scheme with Bank for Agricultural Cooperatives (BAAC) to offer the weather index insurance to farmers who maintain loan contracts with BAAC.

We are developing and promoting insurance products as climate change adaptation measures for farmers of Thailand’s major agricultural exports. For example, in February 2019, we launched a weather index insurance for longan farmers while in May 2021 we launched a weather index insurance for sugarcane and cassava farmers. These insurance programs were developed using technology provided through AgriSompo.

In Myanmar, we developed a weather index insurance that covers drought risk for rice and sesame farmers in the central arid region. This insurance, developed in partnership with the Remote Sensing Technology Center of Japan (RESTEC), makes use of rainfall data obtained by earth observation satellites. This insurance is sold by Myanma Insurance, with technical support from Sompo Japan.

These weather index insurance in Southeast Asia has been recognized as meeting the requirements for membership in the Business Call to Action (BCtA). The BCtA is a global initiative launched in 2008 by the United Nations Development Programme (UNDP) and five government institutions that challenges companies to develop business models with the potential to achieve both commercial success and sustainable development outcomes.

In 2016 we received Japan’s Environment Minister’s Award for demonstrating the Principles for Financial Action towards a Sustainable Society. For our initiative in Myanmar, we received the Minister of State for Space Policy Prize, at the Second Space Development and Utilization Grand Prize presentation.

Future Plans

In the future, through the use of AgriSompo, we will work to provide solutions to agricultural risks specific to each country and contribute to the development of the agriculture sector around the world.

"SORA Resilience": Disaster prevention and mitigation platform-based solution

"SORA Resilience" is a disaster prevention and mitigation platform-based solution jointly developed by Sompo Risk Management, which has expert knowledge of risks, Sompo Japan Insurance, which specializes in insurance knowledge, and Weathernews Inc., a company that has access to meteorological data and boasts analytical capabilities.

In recent times, the world’s attention has been focused on the growing risk of climate change. According to a report of the Intergovernmental Panel on Climate Change, the probability of torrential rainfall and other weather disasters is expected to grow even stronger up ahead as the world’s temperature continues to increase, and as such, the threat of natural disasters around us is intensifying year after year.

On the other hand, the accuracy of numerical forecasts related to typhoon path predictions and weather is improving year by year, and the forecast information can be used as a reference to select more effective disaster prevention and mitigation actions. Even when a disaster is difficult to predict, such as an earthquake, it is essential for resilient organizational management to quickly gather information, make decisions, and take action. "SORA Resilience" is a platform that can contribute to gathering and managing such information.

"SORA Resilience" allows (1) the ability for the user to easily grasp a variety of risk information in real time, (2) the capability to predict risks up to 72 hours in advance for each site and consideration of "when" and "which sites" need to be addressed, and (3) the ability to ensure smooth operations in disaster response, where opportunities are rare. Having developed the system based on these three concepts, we are able to use a wide range of customers in a wide range of industries.

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Related Page

• Support for Customer Disaster Prevention

Initiatives through Industry-academia Cooperation

Development of Flood Risk Assessment Methods for Japan and Asian Countries

To deal with flood risk, which can be affected by medium- and long-term climate change, Sompo Risk Management is engaged in research and development into flood risk assessment methods for Japan and Asian countries to offer new insurance services and risk consulting services that support adaptation to climate change.

In Japan, Sompo Risk Management is utilizing a flood risk assessment system^*1, developed jointly with Kyoto University and Kobe University, for insurance risk management and natural disaster risk consulting.

For Thailand, they are using a flood risk assessment system developed jointly with the Foundation of River & Basin Integrated Communications to manage insurance risk and develop insurance products. They have also developed new flood scenario risk assessment methods^*2 for major urban areas in China, Vietnam, Indonesia, the Philippines, Malaysia, Singapore, and Brazil aiming at enforce risk management system.

They steadily have expanded the area to which they can apply these flood risk assessment systems and methods. In 2017, they added Myanmmar to the area aiming to develop services for Japanese companies which launch businesses in Myanmmar.

1. A system to assess the probability of future flood damage, based on various possible rainfall scenarios.
2. A method to assess flood damage under certain rainfall scenarios, including heavy rainfall observed in the past and probable heavy rainfall (e.g. rainfall of a certain intensity with the likelihood of once in 100 years).

First Private-sector Company in MEXT’s SI-CAT Program

Sompo Risk Management has become the first private-sector company to take part in the Social Implementation Program on Climate Change Adaptation Technology (SI-CAT)^*1 run by the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT).

By collaborating and exchanging ideas with research institutes and utilizing SI-CAT’s research results, Sompo Risk Management aims to quantify the risk of climate change using the typhoon/flood risk assessment models they have developed, research and analyze the changes in opportunities associated with social systems or changes in supply and demand, aiming to improve analysis techniques and build up expertise about climate change risk.

Our aim is to contribute to a sustainable society by developing and providing new solutions to help companies and local governments adapt to climate change, using the technologies and knowledge gained through this initiative.

1. A program launched by MEXT in December 2015 to support the development and implementation of technologies to support areas requiring measures against the impact of climate change. The program Ends in March 2020.

Development of climate change impact quantification technology

Sompo Risk Management developed a technology for quantifying the effects of climate change on natural disasters, collaborating with the National Research Institute for Earth Science and Disaster Resilience (NIED) and the University of Tsukuba.

NIED and the University of Tsukuba provides climate forecasting expertise and data analysis methods, allowing Sompo Risk Management to perform large-scale analysis of typhoons and heavy rainfall using weather and climate big data. This analysis identifies trends in the average frequency and intensity of natural disasters as global warming advances, and quantifies the occurrence of extreme disasters such as major typhoons and large-scale heavy rainfall. These analysis results are then incorporated into the typhoon/flood risk assessment models we have developed for Japan, to quantitatively assess the impact of climate change on insurance underwriting.

By working with NIED, Sompo Japan and Sompo Risk Management aim to enhance the insurance underwriting risk management as well as develop and provide new insurance products and services to help companies and local governments adapt to climate change.

Participation in Global Industry-academia Cooperation Program on Natural Disasters

Sompo Digital Lab, our Group’s digital strategy subsidiary based in Silicon Valley, became the first Affiliate Member of the Stanford Urban Resilience Initiative (SURI), Stanford University’s industry-academia research program on natural disasters, in January 2019.

SURI was established in 2015 with the purpose of researching and developing the latest technologies and tools to build resilient cities and communities prepared for natural disasters such as earthquakes and floods. The university’s prospective PhD students and researchers collaborate on research and development with government agencies, companies and civil societies who share the program’s aims.

Through involvement in this collaborative research program, Sompo Digital Lab aims to fully harness our Group’s data platforms including huge amounts of big data on natural disasters and economic losses, as well as our expertise of disaster risk estimation, together with SURI’s advanced technology and human resources, to develop new services contributing to safety and security on the global theme of natural disaster risk.