The Impact of Climate Change on Agricultural Insurance: The Role of Artificial Intelligence

Abstract

Climate change has significantly increased the frequency and severity of extreme weather events, posing serious risks to agricultural production and food security. Agricultural insurance plays a crucial role in mitigating financial risks for farmers by compensating for climate-related losses. However, the unpredictability of climate patterns challenges traditional risk assessment and premium calculation methods, threatening the sustainability of agricultural insurance systems. Recent advancements in Artificial Intelligence (AI) offer innovative solutions to enhance risk prediction, optimize premium pricing, and improve claims management. AI-driven models, utilizing machine learning and big data analytics, enable more accurate weather forecasting, early warning systems, and real-time damage assessments. This study explores how AI can strengthen agricultural insurance against climate change-induced uncertainties. Additionally, it discusses policy recommendations and technological innovations to enhance the resilience and efficiency of agricultural insurance systems in the face of climate change.