Insurance Daily News

Aon and SAGE Partner to Bring AI to Crop Insurance Pricing

Insurance brokerage firm Aon has partnered with agricultural risk intelligence company SAGE to introduce a new crop insurance program in the United States. The initiative leverages artificial intelligence to analyze diverse data points—including soil conditions, water availability, weather patterns, and human activity—to calculate insurance premiums. By moving away from county-level averages, the program aims to provide pricing that more accurately reflects the specific risk profile of individual fields.

The program is scheduled to launch for the 2027 crop year, targeting corn and soybean producers across 15 states. While specific locations have not yet been disclosed, the offering is intended to function as a supplemental layer of protection rather than a replacement for federal crop insurance. Farmers can maintain their federal coverage for a portion of their expected yield and utilize the SAGE policies to cover production above that threshold. Aon’s modeling indicates that this approach could potentially reduce costs for growers by $10 to $15 per acre on supplemental coverage.

This initiative is currently undergoing a pilot phase through the Resilience in Agricultural Lending and Insurance Coalition (RALIC), with partial funding from the Michigan Department of Agriculture and Rural Development. The pilot covers over one million acres, accounting for roughly 12% of Michigan's agricultural land. SAGE utilizes AI models capable of processing billions of data points to identify risk and resilience patterns that were previously undetectable at scale.

(Context/Analysis) This development highlights a significant shift in agricultural risk management, moving from broad, regional actuarial models to hyper-local, data-driven assessments. For the LIMS and agricultural tech sectors, this underscores the growing value of granular field data. If successful, this model could incentivize farmers to adopt more resilient practices by directly linking those investments to lower insurance premiums. Industry observers should watch how adoption rates fare during the 2027 rollout, as the success of this program hinges on the accuracy of SAGE’s AI models and their acceptance by the broader insurance market.

The broader context for this launch is the rapid integration of advanced technology in farming. According to McKinsey’s Global Farmer Insights 2026 report, approximately 17% of farmers globally are already utilizing generative AI for agricultural tasks. With the USDA and traditional insurance providers historically struggling to quantify field-level differences, the Aon-SAGE collaboration represents a notable attempt to bridge this gap. Interested parties can access further information regarding the program ahead of the spring 2027 enrollment period via the SAGE website.

Why it matters

This partnership demonstrates how AI can transform agricultural insurance from generalized, county-level pricing into precise, field-level risk assessment, potentially lowering costs for farmers who invest in resilient practices.

FAQ

When will the new crop insurance program be available?
The program is scheduled to be available to corn and soybean growers for the 2027 crop year.

How does this program differ from federal crop insurance?
Federal crop insurance is priced based on average risk per county, whereas the SAGE program uses AI to price insurance based on the specific risk of individual fields.

What is the role of the pilot program in Michigan?
The pilot, managed by the Resilience in Agricultural Lending and Insurance Coalition (RALIC), covers over one million acres to test the AI-driven risk assessment model.

Source: Insurance Journal. See the original source for full details.