This research investigates how cluster analysis and artificial intelligence (AI) can be used to increase agricultural productivity and sustainability in the Republic of Srpska. More accurate strategic planning and effective resource management were made possible by the identification of particular clusters with comparable traits through the analysis of climatic parameters and the classification of regions. While the use of machine learning techniques allows for more precise forecasting of the effect of climatic conditions on yields, the suggested insurance models, which are based on cluster analysis, have the potential to improve farmers' financial protection. This research emphasizes the necessity of creating customized insurance models that account for particular climatic risks and implementing contemporary technology to enhance the claims resolution procedure. Through these approaches, it is possible to significantly increase the resilience of the agricultural sector to climate change and ensure better financial stability and safer production.