Case 1: Protecting farmers against the weather

Problem

Hot weather causes cows to produce less milk.

Solution

Temperature-triggered parametric insurance covers the loss.

Data

Temperature data at insured locations is measured by remote sensors and transmitted to Skyline Partners for computation using its proprietary InsDex platform.

Structure

Temperatures exceeding an agreed threshold for a specified duration trigger a payment which increases with temperature and duration.

Partner

NFU Mutual (principal client)
Markel International (insuring partner)
AJ Gallagher (distribution partner)

Spells of hot weather are more common world-wide due to climate change. They cause heat stress in dairy herds, which reduces milk yields. NFU Mutual, the UK’s leading agricultural insurer, chose Skyline Partners to develop an insurance product to cover the risk. Markel International carries the risk, under policies distributed by broker AJ Gallagher.