I-Corps: Intelligent risk management for the US crop insurance industry

University Of Illinois At Urbana-Champaign, Urbana IL

Investigators

Abstract

The broader impact/commercial potential of this I-Corps project is in providing agriculture-related industries with novel field-level intelligence to inform critical farming decisions in the form of granular metrics for sustainability and productivity. Consumer packaged goods (CPG) companies could use these sustainability metrics and related services to quantify and monitor the environmental footprint on their contracted farmland, which may help to achieve their sustainable sourcing targets. The farmland productivity metrics, when incorporated with related financial information, are important for any farming-related financial decisions. For example, the (re)insurance companies could use these productivity metrics to assess the potential insurance risk before the growing season starts, determine the pricing of reinsurance contracts, and develop new index-based crop insurance products for developing countries. Farm loan lenders could use these metrics to estimate the potential default risk for individual farmers, and quantify the aggregated risk for their entire farm loan portfolio. Our metrics could also provide a more comprehensive evaluation of farmland’s suitability, profitability and farming riskiness for farmland investors to make informed land investment decisions. Last but not least, the commodity traders could also use the real-time yield forecast to predict the potential price changes in the market. This I-Corps project explore the market for granular level sustainability and productivity metrics in the agriculture industry. The technologies include satellite data, modeling based on deep domain knowledge, artificial intelligence, and cloud computing combined together to achieve a complete and scalable solution to assess field-level information for sustainability, productivity, and financial risks. These granular metrics include 1) crop metrics (e.g. crop types, crop yield, annually-changing field boundary, for both past 30 years and forecasting; 2) sustainability metrics (e.g. field-scale management practices, carbon emission, storage and change of soil organic carbon, crop water consumption, soil moisture, nitrogen leaching); and 3) financial risks (e.g. probabilistic distribution of loss ratio for crop insurance, farm-level financial projection for revenue). This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.