University of Southern Queensland’s Jenny Wang has been awarded a $431,000 Australian Research Council fellowship to help customise weather index insurance offerings.

Dr Wang will identify a machine learning algorithm which can detect drought events using satellite image data, and then develop location specific drought indicators which can be used to provide more accurate coverage.  

Weather index insurance (WII) policies currently use data from local weather stations, providing a payout to agribusinesses when the parameter moves beyond a pre-specified point.  

More can be done to increase its uptake, Dr Wang, who will work in partnership with insurtech CelsiusPro, says.

“If you live close to the weather station the parameters can be quite accurate but if you move further away, these parameters become less precise, which leads some to forgo purchasing the product – a phenomenon known as spatial basis risk,” she said.

“The purpose of our project is to overcome this key disadvantage and help satisfy changing demand. 
“With climate change going the way it is, we expect extreme weather events to occur more frequently. If we can create better-tailored products, which also speed up the payout process, we can support farmers to continue their practices which ultimately protects the country’s food supply.”

CelsiusPro CEO Jonathan Barratt says use of weather index insurance is “fast becoming a staple in agricultural production and research like this will help to provide a much-needed scientific footprint”.