Loyalty program with risk transfer for manufacturer of pesticides

Background: A chemicals manufacturer in China markets its pesticides and provides information about local weather and best practice in crop care through a smartphone app. The company wanted to integrate a client loyalty programme that would allow local farmers to benefit from free-of-charge replacement for already purchased pesticides if their crops were damaged by a severe storm. This additional benefit was intended as a differentiator to induce growth in sales.

Protection buyer objectives: The manufacturer wanted to transfer its exposure to the cost of providing free replacements to the insurance market.

Risk transfer solution: The result is a parametric typhoon cover, which indemnifies for the cost of replacement agrichemicals and for damaged crops, based on wind speed severity and typhoon track within a certain geographic area. A pay-out is triggered by wind speeds exceeding a defined threshold.

Benefits: The manufacturer can increase client loyalty by offering an insurance add-on to its product which even justifies a small price increase for the product. The free-of-charge replacement feature provides farmers with financial relief when they need it most. The distribution of weather- and claims-related information through the mobile app creates additional value and differentiates the product to appeal to a modern generation of tech-savvy farmers.

In our newest sigma 05/17 "Commercial Insurance: innovating to expand the scope of insurability" you can read more examples of innovative insurance solutions we have developed to protect our clients from earnings and cash flow risks.

Your risks are unique. Sometimes you need an innovative solution, not a conventional risk transfer product. At Swiss Re Corporate Solutions, we understand that the traditional market doesn't always meet your needs. That's why we use our risk capital to create smart, creative solutions to the most challenging risks around.

Learn more about our Innovative Risk Solutions.