Growing need for insurers
WHILE crop insurance may seem like a dry topic for some, for the farmers in need of it, it’s deeply important.
This was highlighted at the recent Rural Press Club meeting with two young farmers standing up in front of the packed luncheon to explain the hardship and uncertainty current agricultural insurance systems had placed on their business.
Being locked into one-year arrangements, which are at odds with the longer-term cyclical nature of farming, and not knowing if they would even get an insurer for the upcoming season were two topics they brought up. It was clear the men were speaking from the heart when they explained current systems were not working.
Flying in from London, Willis Towers Watson agribusiness and weather managing director Julian Roberts talked through finding the “holy grail” of agricultural insurance – a system that’s affordable, effective and sustainable, or in simple terms: something that suits Queensland farmers’ needs.
He said decent agricultural insurance systems were important for everyone, not just farmers.
“Managing the risk of agriculture production is of private and public good,” he said.
However, while agricultural insurance is big business in the US and Canada, and Mr Roberts even highlighted an example of a policy in the Hammurabi Code, written in 1772 BC, the current take-up in Australia was slim.
“Property insurance and agricultural insurance has been available in Australia for
decades,” he said.
“Yet, the take-up is very low, I have heard it’s around 1%.
“It’s clearly not going right. I guess it’s largely due to cost.”
Mr Roberts touched on the importance of the Drought and Climate Adaptation
program (DCAP), which is currently under way.
The research, which at the moment is focussing on the sugar and cotton industry, is investigating how insurance companies, agricultural industries and government
can establish and maintain a liquid and viable market for agricultural insurance in Queensland, and Australia.
The University of Southern Queensland, Willis Towers Watson and Queensland Farmers’ Federation are
involved in the program.
While Mr Roberts said he didn’t have the answer to what the holy grail of crop insurance for Queensland would look like, he said he believed it was possible to find.