Hail insurer holds off on premium increases despite drought losses

Austria’s agricultural sector has suffered about one billion euros in drought damage, with the Austrian hail insurance company covering around 400 million euros, ORF reported. Despite the losses, insurance premiums are not expected to rise for now.

Damage in Styria is estimated at about 140 million euros, but the total could increase if there is no significant rainfall in the second half of August. Around 50 experts from the insurer are currently assessing damage across the province.

Drought is not the only source of losses, said Josef Kurz, the insurer’s state director. Hail and frost damage is also being assessed, while drought surveys are under way. Some farmers have already begun harvesting maize early and using it for silage in an effort to save what remains of the crop.

Insured farmers can expect compensation payments. About 85 percent of arable land and 40 percent of grassland in Styria is insured against drought damage.

“At present, this is not an issue,” Kurz said of possible premium increases. The matter will be reviewed in autumn, after the harvests have been brought in. He said the company currently had sufficient reinsurance cover.

Farmers who take out drought insurance receive financial support. The federal government and the province together cover 55 percent of the premium for drought index insurance.