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The Impact of Extreme Weather Events on Agricultural Insurance in Europe

Author

Listed:
  • Alina Claudia Manescu

    (Faculty of Economics and Business Administration, West university of Timisoara, 300223 Timisoara, Romania)

  • Flavia Mirela Barna

    (Faculty of Economics and Business Administration, West university of Timisoara, 300223 Timisoara, Romania)

  • Horatiu Dan Regep

    (Faculty of Economics and Business Administration, West university of Timisoara, 300223 Timisoara, Romania)

  • Camelia Maria Manescu

    (Faculty of Management and Rural Tourism, University of Life Sciences ”King Mihai I”, 300645 Timisoara, Romania)

  • Cristina Cerba

    (Faculty of Economics and Business Administration, West university of Timisoara, 300223 Timisoara, Romania)

Abstract

In Europe, climate change has a big impact on agriculture, due to an increase in the frequency and severity of extreme weather events. Many and prolonged droughts, heatwaves, floods, and hailstorms cause major economic losses that affect crop quality and generate instability in supply chains. In this study, we analyse the evolution of extreme weather events across Europe starting from the 1980s. The economic losses caused by extreme events were divided into three categories: heatwaves, frost, and fires; floods; and storms. In order to identify the trend and any shifts of the trend of the extreme weather events, we calculated moving averages over different periods: 5, 10, 20, and 30 years. The moving average analysis shows how climate change has altered from causing isolated and temporary economic losses to generate a consistent upward trend in losses, with an increasingly significant impact in the short, medium, and long term. In the second part of this study, we conducted a correlation analysis between the economic losses caused by extreme weather events and variations in property insurance premiums (fire and other property damage—which includes crop insurance premiums) and we calculated correlation coefficients directly, with a one-year lag, and with a two-year lag. Thus, we analysed whether insurance markets respond immediately to incurred losses or whether, depending on climate trends, there are delays in premium adjustments.

Suggested Citation

  • Alina Claudia Manescu & Flavia Mirela Barna & Horatiu Dan Regep & Camelia Maria Manescu & Cristina Cerba, 2025. "The Impact of Extreme Weather Events on Agricultural Insurance in Europe," Agriculture, MDPI, vol. 15(9), pages 1-20, May.
    • Handle: RePEc:gam:jagris:v:15:y:2025:i:9:p:995-:d:1648906
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    References listed on IDEAS

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    1. Corey Lesk & Pedram Rowhani & Navin Ramankutty, 2016. "Influence of extreme weather disasters on global crop production," Nature, Nature, vol. 529(7584), pages 84-87, January.
    2. Schmitt, Jonas & Offermann, Frank & Söder, Mareike & Frühauf, Cathleen & Finger, Robert, 2022. "Extreme weather events cause significant crop yield losses at the farm level in German agriculture," Food Policy, Elsevier, vol. 112(C).
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