CropAware© A Proposal for a Connected Crop Insurance SystemMatt Kulangara8/1/2016

Opinions are my own and not the views of my employer.

Introduction• Crop Insurance in the US is a Federally Subsidized Insurance Program

– Insurance Companies Sell and Service Crop Insurance Policies, and Large Losses are paid by the Federal Government

– Crop Insurance covers losses to farmers to crops from natural events: (droughts, hail, flood) and from losses due reduction of crop prices

– Crop insurance is Mandatory for Farmers who want to be compensated by the Federal Government

Crops Damaged by Hail

Crop Insurance currently insures 100M Acres of Farmland in the US with an annual losses exceeding $100B. Roughly 4% of Losses can be attributed to “Abuse” or fraud (Chase, 2016). When Losses are not covered by Premiums, Losses are covered by the Tax Payer.

Crop Insurance• Pricing Methodology

– Premium= f(type of Crop, Acres Planted, County)– County gives idea of potential environmental factors (susceptibility to drought, hail, etc.)– Acres Planted gives an idea of total possible loss to revenue

• Flaws in methodology– County doesn’t necessarily give an idea of how arable land is (is it swampy, on a slope,

etc. )– Acres Planted are not verified and can be a cause of Insurance Fraud

• Claims– It is expensive to check every claim of loss, and most claims are not checked

CropAware© Overview• CropAware© creates a connected system for monitoring

crops by Insurers and Farmers– That Safeguards against the most common cause of

Insurance Fraud – Erroneous Crop Acreage and integrates with the Federal ACRSI System (USDA, 2016)

– Gives more accurate estimates of crop yield by taking soil conditions and topology into consideration beyond just county level estimates.

– Provides real-time reporting of potential claims with imaging and weather sensors– without the need for expensive site visits by adjusters.

– Using proprietary logic estimate accurate losses after an environmental event

Benefits of CropAware©• To Farmers

– Gives Farmers a Real-time dashboard of soil conditions (moisture), wind speed, and Temperature as well as integration with Weather forecasts. This tool will allow farmers to be proactive and to maximize profits.

– Integration allows faster Claims Payments

• To Insurers– Allows Insurers to set policy conditions for Risk Control and select more compliant

farmers• Example: If Farmers keep moisture level above a certain level, provide Premium Reductions

– Allow better assessment of risks by integrating sensor data with climate and geographic data

– Save costs to mitigate Insurance Fraud- Adjusters are not needed for claims – Transparent Integration with Federal Systems

• To Society and Government– Savings in Losses assumed by Government and the Tax Payer by reducing Insurance

Fraud

CropAware© How it Works• System Consists of

– Device (CropPath) that plugs into the diagnostic port of seeding tractor that transmits true planted acreage, using embedded GPS hardware and software to a Gateway through WiMAX.

– Wireless Movable Sensor Cluster(s) that are placed strategically every 100 acres (Software suggests placement). Sensors measure temperature, wind speed, PH, and also include a Hail Sensor. The cluster also has a camera that takes infrared pictures. Data is submitted hourly to the Gateway.

– A centrally located Wired Gateway , that has a WiMAX connection and a Transceiver for communication with CropAware’s© Proprietary Cloud Platform.• Transceiver receives weather alerts and sends data every hour that is cleansed from the CropPath Device and all

Sensor Clusters

How it Works - Continued– User Interfaces

• A Farmer UI as a Website and IOS/Android App– Farmer receives push notifications of crop conditions, and any relevant climate events– Farmer receives insight on the best areas to plant crops for best results– Farmer receives guidelines on where to best to position Sensor Clusters– Notifications on status of connected components from the Gateway

• A Dashboard for Insurers– Gives True picture of Damage after Losses from images– Allows Insurers to make sure that Crops are actually been grown on arable lands– Allows Insurers to identify Farmers that are negligent in not growing crops – Provides Portfolio level Analytics from Data Mined data across all served Farms that allows Insurers to allocate Reserves

• Interface to Federal Systems– Interfaces directly to the Federal ACRSI System, loading data securely directly to the Federal Government’s Risk

Assessment and Fraud Detection Tool

CropAware© Architecture Highlights:1. Sensor Clusters powered by

Solar2. Sensor Cluster has sensors for

PH, infrared Temp Sensor, wind Sensor, Hail Sensor, and a still image camera

3. CropPath Device draws energy from Seeding Tractor

4. All components (Gateway + Sensor Cluster(s) + CropPath) communicate with WiMAX

5. The Gateway connects with the local LAN

6. Gateway has 32GB of Storage and pushes data to the cloud twice a day or when space has been exhausted.

Design Choice:WiMAX selected because ofdistances (up to 30 miles)could be used for transmission. (Reardon, 2008)

CropAware© Sensor Cluster Design SketchSensors Included:1. Still Camera2. Infrared Temperature Sensor3. Hail Sensor (Vaisala Raincap© Sensor) (Vaisala 2016)4. Wind Turbine-Style Sensor (Vaisala Windcap© Sensor)- Vaisala.com5. pH Sensor (Edyn Sensor) (Markhan, 2015)- Vaisala.com

Operation:6. Readings taken hourly and sent to Gateway7. Gateway scrubs data and submits to CropAware© Cloud twice a day8. Sensor Cluster does not receive

Power:9. Solar Powered with backup standalone Car Battery

Security:10. Data is not encrypted, however data is signed, so that data cannot be

spoofed and set to the Gateway

Ease of Install:11. Weighs under 20 lbs and easily movable12. Delivered in box with minimal installation13. Designed to be installed by lay person

Design Sketch – CropPath©Sensors Included:1. Includes GPS chip Operation:2. When Seed Tractor is Powered on, GPS position is collected every 5

minutes3. Data is transmitted through WiMAX. Acreage is calculated based on

collected dataPower:4. Powered directly by Tractor (no battery in CropPath©

Security:5. Data is not encrypted, however data is signed, so that data cannot be

spoofed and set to the Gateway

Ease of Install:6. All that is required is plugin into Diagnostic Port7. On Startup Heartbeat message is sent through WiMAX to Gateway8. Led light indicates connectivity with Gateway

User Interaction Farm Interface

Interface shows acreage on Farm, areas of concern, Warnings, and a Farm Snapshot

Interface assists in positioning Sensor Clusters and also shows Connectivity Status

User Interface Design- ContinuedInsurance Company Interfaces

Farm Loss Interface projects Losses at the Farm Policy level due to an climate event.

Interface shows projected portfolio level losses across all insured farms in an area due to a single climate event.

CropAware© Product Introduction

CropPath© Standalone Offering• Sold to Farmers• Consists of CropPath© and

Gateway• Integrates with ACRSI and

mandatory Acreage reporting• UI Provides Insights to Farmer• Price point: $1500 with $50/month

service fee• Cost to Build: $300

CropAware© Complete System• Sold to Insurers • Website will allow Farmer to configure

System and number of Sensor Clusters• Insurers provide System for free to

Insured Farmers and see reduction in Losses

• Plus all the benefits of CropPath©• Price Point: $1200 + $250/Sensor Cluster

and $50/month service fee• Cost to Build: $300 + $100/sensor cluster

Size of Potential Market: $4B

References1. Chase, S. (2016, July). RMA touts crop insurance statistics | AgriPulse. Retrieved August 01, 2016, from

http://www.agri-pulse.com/RMA-touts-crop-insurance-statistics-07072016.asp 2. Markham, D. (2015). From Kickstarter to Home Depot: Edyn smart garden sensor brings IOT to your garden. Retrieved August 01, 2016, from

http://www.treehugger.com/gadgets/kickstarter-home-depot-edyn-smart-garden-sensor-brings-iot-your-garden.html3. Reardon, M. (2008). What's the big deal about WiMax? Retrieved August 02, 2016, from http://www.cnet.com/news/whats-the-big-deal-about-wimax/ 4. USDA. (2016). Frequently Asked Questions- Acreage Crop Reporting Streamlining Initiative (ACRSI). Retrieved August 02, 2016, from

http://www.rma.usda.gov/help/faq/acrsi.html