The working group on risk management in
Box-5 (a) : Insurance Model of Spain
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| Box-5 (a) : Insurance Model of Spain Spain Spain has a unique model of crop insurance in terms of both the program and the organizational setup. Spain has, what’s known as the Combined Agricultural Insurance System. The system started in 1980, has recently celebrated its Silver Jubilee. The basic feature of the system is that all insurable agricultural risks are covered by the private sector and all types of policies are subsidized by the state. Most policies are of the multiple risks type. The customers of the system, are farmers who can takeout agricultural insurance individually, or obtain coverage through cooperatives and professional organizations. Participation in the system is voluntary. It is a system in which ‘AGROSEGURO’ operates, both in its own right and on behalf of the insurers, who makeup the coinsurance pool. The system is based on an intricate partnership between the private and the public sector. The key players of the system besides farmers, are ENESA (Entidad Estatal de Seguros Agrarios), attached to the Ministry of Agriculture AGROSEGURO (Agrupación Española de Entidades Aseguradoras de los Seguros Agrarios Combinados), a pool of forty private insurance companies which participate in a system of coinsurance CCS (Consorcio de Compensación de Seguros), a public enterprise with its own resources, operating as a re-insurer (under the control of the Ministry of Economy), etc. A key feature of the Spanish system is the participatory approach. All stakeholders are represented in ENESA, which enables taking strategic decisions and fixing the framework for the System (annual plans) inline with their needs. For any given year, ENESA takes the lead in publishing the annual plan. On the basis of the framework set out in the plan, AGROSEGURO fixes the detailed conditions for all insurance products, in particular the regionally differentiated premium rates which vary according to risk exposure and also include administrative and reinsurance costs. Subsidies from the State and the Autonomous Regions are paid out by ENESA and channelled through AGROSEGURO to the insurance companies. Based on experience from 1980 to 2005, of the total agricultural insurance income of Billion US, the contribution of farmers towards premium was 3.0755 Billion US (45%) and that of ENESA and Autonomous Regions was 3.7089 Billion US (55%). |