Hillridge & MSIG offer drought insurance to farmers

Hillridge and the Mitsui Sumitomo Insurance Group (MSIG) Vietnam have inked a partnership that sees the Australian insurtech startup enter Vietnam’s agricultural insurance sector with a new product that protects farmers nationwide from the risk of drought.

The new product, powered by Hillridge’s acclaimed platform and underwritten by MSIG, insures farmers against the volatility of the southeast Asian climate.

The first-of-its-kind product was inaugurated at a ceremony in Hanoi on June 7, where Hillridge CEO Dale Schilling remarked that 2023 has proven to be a prescient year for it to launch this product, with El Niño threatening much of Vietnam with dry conditions. “We recently visited many of the coffee growing areas in Vietnam’s central highlands, where farmers said how drought has caused their crops to fail in the past, greatly impacting their harvest, yields, and ultimately their livelihoods,” he added. “Farmers have an increasing need to insure themselves against the impact of these kinds of adverse conditions.”

He also noted that this type of agricultural insurance has not yet appeared in Vietnam. “That’s why we want to bring this mainstream product to the Vietnamese market,” he said.

His co-signatory, MSIG Vietnam Deputy General Director Ms. Nguyen Thi Lan Phuong, said the Japanese insurance giant, with a 14-year history in Vietnam, sees the agriculture sector as a key area in which it can expand its already broad product portfolio.

“This is the first agri-insurance product we have launched in Vietnam, where it joins our extensive portfolio of products, including Personal Insurance such as Personal Accident, Healthcare, Travel, Home and Motor insurance, and liability and property insurance in various sectors,” she explained. “With almost 40 per cent of the land in Vietnam used for agricultural purposes, and for the sustainable growth of a sector that accounts for almost 13 per cent of GDP, I believe that this product will be the best shield for farmers to protect what they care about.”

The Vietnamese Government, recognizing the urgent risk that an El Nino-triggered drought represents to the country’s agriculture sector, dispatched a delegation to central Quang Nam province in May to report on the risk to crops between now and year’s end. It reported a 70-80 per cent probability of further drought in the central province between late summer 2023 and early 2024.

Hillridge’s platform is a Vietnam first, allowing farmers to directly log-on online and secure quotes against drought in real time. Any agricultural business susceptible to drought can buy cover through the platform.

An agreed payout is determined before the commencement of the insurance policy, and when conditions are met, payouts are made accordingly - simplifying procedures for both the insured and the insurer.

The Vietnam signing is an extension of a successful partnership between the two in Mr. Schilling’s native Australia, where Hillridge and MSIG teamed up in 2021 to protect Australian farmers against adverse climate events that impact their harvests.

“Vietnam is particularly susceptible to the impact of climate change,” Mr. Schilling continued.  “Products like this will increasingly become an essential part of operations for Vietnam’s farmers, who will ultimately need to protect their livelihoods against the increasing weather volatility that rising global temperatures, climbing sea levels, increasing salinization of waterways and more frequent drought is set deliver.”