Extreme weather events such as drought, heat waves and excess rainfall constitute an important and increasing source of risk for crop and livestock farmers, also in Europe. Currently there is a lack of efficient instruments for farmers as well as up- and downstream industries to transfer these risks.
Innovative insurance solutions based on weather index solutions or based on remote sensing can play an important role in complementing traditional insurances. More specifically, the use of novel, free, large data sources (e.g. on weather and crop phenology, remote sensing data) offers large potentials to develop tailored insurance products also for European agriculture. In this contribution, I i) motivate advantages and limitations of index and remote sensing based insurance solutions, ii) review their application in European agriculture, and iii) present novel approaches to reduce spatial, temporal and design basis risk of these innovative insurance solutions.