Farm data firm hooks up with reinsurance giant
Digital service for assisting crop insurance
A Winnipeg-based farm-management company that combines big data with agricultural performance is forming a partnership with a major international reinsurance giant.
The four-year deal between Farmers Edge and Bermudabased PartnerRe Ltd. will allow the Canadian company to expand into new markets with the digital technology that has already helped reshape the way many farmers do business.
It is hoped that technology will help PartnerRe, which covers the risk of individual insurers offering direct policies, provide access to clients so they can offer more location-specific policies to farmers unwilling or unable to take out risk coverage on crops, limiting their ability to invest and grow their businesses.
Wade Barnes started Farmers Edge in 2005 with his friend Curtis MacKinnon. A former agronomist who has worked as a crop adviser, Barnes saw an opportunity with the growth of digital information. “We wanted to join the dots for farmers,” he said.
The two-man company began with 8,000 hectares worth of client business. Today it has more than 400 employees worldwide and expects to be dealing with more than 10 million hectares by the end of this year. Farmers Edge brings together digital tools to provide farmers a package of real-time information, such as commodity costs, pest threats and weather data.
“But in 2014 we started focusing more on the data. We think agriculture is ripe for a significant disruption as has happened in other industries. Farmers Edge is leading that change. Rich data leads to predictive models which then tell a farmer such things as when he might get a disease outbreak, what his future yields might be — before long we will be predicting when their equipment breaks down before it does,” he added.
Barnes believes the deal with PartnerRe will speed up the spread and acceptance of their digital tool kit, especially in those areas of the world where farmers have never taken on crop insurance nor been exposed to data analysis of their fields.
“There’s been a solid insurance product in North America around for a long time and that has enabled farmers to take more risk. But with the data we can provide it allows insurance to be more tailormade and gives farmers an alert ahead of time when the crop is in danger. It is really going to help insurance companies do a better job of managing that risk and help farmers get better products from those same insurance companies,” Barnes said.
As a global reinsurance company PartnerRe can provide Farmers Edge’s services to a host of separate insurers and agents who subsequently deal directly with individual farmers, Barnes said. Farmers Edge expects the partnership to open up major farming area globally and allow them to bring their technology to at least 20 million new acres of farmland within the four years.
“Farmers are pragmatic,” he said. “They want to make sure they’re not just adopting technology for the sake of adopting technology — there has to be a payback. Some of the folks coming in from Silicon Valley think they can create a neat app, but farmers are not looking for a cool app. They want technology that drives increases in productivity and decreases costs. If you don’t have that, if you are not real, then they don’t have time for you.”