The demand for agricultural insurance is growing every year in Brazil. The insured area has 5.65 million hectares in 2016 to 8.64 million hectares last year, according to the Rural Insurance Program Report of the Ministry of Agriculture.
Even with the increased demand for insurance, the area of protected crops still far from ideal. While in the United States more than 90% of the rural area is covered by rural insurance, in Brazil this index is only 12%.
The director of Tovese Corretora de Seguros, Otavio Simch indicates one of the best hiring options, the insurance per plot, which presents a better return than the one realized by average ownership. The cost between the two modalities is almost the same, but while the first option considers only the share of the property attained, the second makes an overall average of the contracted area.
In the model by average productivity, which is used by Proagro and in some other models of insurance, under the same conditions, the average of the entire area is made. If the producer has produced a general average of 40 bags per hectare, he will not be compensated.