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Insurers paid R $ 842.3 million for agricultural machinery damages in 2024, marking a 25.4% increase from the previous year, as per CNseg data. Factors contributing to this rise include losses from floods in Rio Grande do Sul.
Different states experienced wildfires and burns last year.
Insurance companies have paid $2.8 billion in the last five years for issues with farm equipment.
The rise was mainly due to the floods in Rio Grande do Sul, which led to a significant number of equipment being completely lost in the area, according to Fábio Damasceno from FenSeg.
Fires and high temperatures worsened losses in Brazil, according to Damasceno, resulting in the destruction of sugarcane and coffee plantations in São Paulo.
An uptick in insurance demand is expected in 2025 due to higher losses and compensation.
It is anticipated that there will be a rise in the procurement of rural insurance for farm equipment in 2025 due to the losses experienced in 2024. This trend is likely to be influenced by the elevated prices of agricultural commodities, which motivate farmers to upgrade their machinery, according to Damasceno.
Approximately 33% of agricultural machinery purchases in Brazil are made using bank financing that necessitates insurance. This situation is expected to lead to a rise in the demand for insurance services, according to Pedro Estevão, the president of Abimaq, as reported by “Globo Rural”.
The agricultural machinery and equipment sector is bouncing back following a sales decline in 2024. In January, sector sales amounted to R$ 4.2 billion, marking a 23.3% increase compared to the previous year, as reported by Abimaq.
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