Fertile new insurance field

A NEW form of crop insurance is being trialled on farms in Queensland.

The policy is set to fill the gaps left by current providers after a stocktake was conducted by the Queensland Farmers’ Federation, the University of Southern Queensland and Willis Towers Watson.

QFF natural disasters project manager Ross Henry said the policy would be a parametric insurance.

“A traditional insurance in relation to crops or your car is based on the value of the damage that is done to it,” he said.

“With this new one ( insurance) we remove that from the equation, it’s just based on the weather event.

“So if we know it’s going to cause significant damage to a crop we can work out the product based on the probability of it happening.

“If it happens, the policy is triggered and then payout occurs.”

Mr Henry said so far they had been working with cane farmers, and were now moving on to cotton and horticulture.

“It’s called a Cat in a Box, it’s not something totally new but it is new for Queensland,” he said.

“It means catastrophe in a box or a defined region and we are trialling it with sugarcane and horticulture producers up and down the coast.

“It’s been quite successful and we are happy with it, but the more people we can trial it with, the more we can understand what it looks like and how it pays out and get better outcomes.”

He said the farmers were getting excited about the cover.

“Cyclone risk is pretty significant in Queensland and to date there hasn’t been anything but a bit of government support to help people re- cover,” he said. “In regard to risk management, it’s a useful tool to offset the financial impacts. We’ve also received a lot of feedback on the flexibility of the product because it’s not based on the value of a crop. It’s very tailorable to the farmers’ needs.”

Mr Henry said they began researching after Cyclone Debbie.