Future proofing for an unknown climate

Farm risk management in a changing climate


Cropping
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Advertiser: Reducing risk and variability vital for farming productivity

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This is advertiser content from MGA Insurance Brokers

As the global population swells, food shortages increase and unpredictable and destructive weather patterns prevail, the reliance for agricultural production has never been greater for Australia.

Although, the value for farm risk management and security is in many cases overlooked or incorrectly implemented by farmers who deem Mother Nature's perils and fluctuating market prices as a way of life.

Mr Steven McInerney of MGA Brokers, one of the nation's leading insurance brokerages, stresses the importance of insurance for protecting farmers' livelihood, in such a volatile climate.

"Not having insurance is a huge risk to take," Mr McInerney said.

"Weather patterns are changing, crops are coming on at different times, so from an insurance perspective we’re seeing a major shift in weather patterns and increased losses."

Mr McInerney makes reference to more recent and unusual weather patterns and the severity of their impact.

"Last year South Australia had severe storms and one insurance company recently told me that we had 30 percent of our dollar value of all claims for the last 30 years in the last 12 months."

"This is highly unusual for South Australia because generally we've been looked upon as a stable state as far as weather events. Things of that sort of nature you'd expect of Queensland, a lot of windstorms and hail, so it's been extraordinarily busy in that regard," he said.  

But despite these unpredictable and devastating weather conditions Mr McInerney reports an alarming amount of underinsurance occurring in the agricultural industry.

"We commonly find that farmers underinsure, forget to insure new purchases or insure incorrectly in that they may have assets on their property that they don't get independently valued, so therefore they have no realistic idea what to insure for," Mr McInerney said.  

"For example, a shearing shed they may only have $100,000 on and from the dimensions provided and the number of stands etc we would have a pretty good idea that it's underinsured, so we'll put it through a computer programme and that will give the client an indication on what values they should consider.

"So we can guide them in that way, to try to make sure they are not left out of pocket if they need to claim."

Mc McInerney said that when disasters, such as the Pinery fires occur, farmers that had taken an optional unspecified insurance cover over their farm buildings, machinery and contents had the ability to claim on a lot more assets than their neighbours, who may have been insured with an inferior policy.

With various farming practices and diverse landscapes across Australia, there are significant differences in methodology, equipment and systems.

In light of this diversity, a need has arisen for a combined farm policy that covers key components of a farm's insurance risk policy in one policy.

MGA's market leading and exclusive, underwriting agency Millennium, offers unique farm products with 14 different sections that you can change as you need, taking only what is suitable for your circumstances.

"We can access additional benefits such as accidental damage on farm machinery, buildings and contents, as well as farm Management Liability cover," Mr McInerney said.  

Mr McInerney said most farmers have been insuring for years and years with the traditional covers but the options available are a lot more comprehensive now and offer greater flexibility of coverage.

With access to a wide range of insurers and the ability to compare costs and covers from the wider market, MGA Brokers are in a unique position to identify risks and provide advice on how to minimise and control those risks, which aim to reduce the number of claims and lower premiums.

MGA Brokers have a heavy rural and regional focus and as market leaders they took the opportunity to work one-on-one with farmers to strategically assist in developing policies that suited their needs and helped to successfully safeguard their livelihood from financial harm.

"We saw this as something that fits squarely within our appetite so we went to various farming groups and sat down and listened to what they wanted and needed.

"We were connected from a customer's perspective and we helped develop some additional covers and policies that were really meaningful in the farm and crop insurance space," Mr McInerney said.  

This is advertiser content from MGA Insurance Brokers

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