Australia’s record flooding shows no sign of letting up. Western Australia’s Kimberley region continues to suffer from recent inundations. Monday also saw heavy rain and flash flooding in Central Queensland.
Despite the extent and gravity of the ongoing floods, Danielle Whitelock (pictured above) from specialist agricultural insurer Achmea Australia, said there hasn’t been much that was unexpected.
“As an insurer, there weren’t too many surprises but something to call out that’s quite particular to the agri sector is that farmers and the businesses that they support are quite resilient,” said Whitelock, who is general manager of client experience. “So they themselves have often been through floods previously and they really concentrate on risk mitigation.”
She said farmers are quite proactive in preparing for and mitigating their own farm risk before an event happens.
“We also know from having seen floods before that the flood risk can be quite difficult to manage but anything that our farmers can do to help reduce the risk - and we try and help them be educated about different things that they can do - really helps in the event of a loss like this,” she said.
Whitelock said Achmea’s agricultural clients are very diverse but risk prevention can include something as simple as building on higher land.
“If you’ve got a huge location, what we often see is that farmers will design where they put buildings, depending on where the risk is from the local river or water source,” she said.
Some of Achmea’s clients are also designing buildings with power boards and electricity supply at ceiling height instead of floor level and making sure they have back-up generators on site.
“So that in the event that they might be cut off from power, they’re ready to recover as soon as they can,” said Whitelock.
But with all the industry talk, including in the farming sector, about the expense of flood cover, its unavailability and the consequent widespread issue of underinsurance, Achmea and its farming clients appear to buck the trend.
“As a direct and specialized agricultural insurer we automatically include flood in our policy,” said Whitelock. “We do that because we believe it aligns with our purpose which is to keep farmers farming.”
Her firm uses the standard industry definition of flood and provides cover for farm houses, vehicles, other agricultural buildings and their contents.
“We offer a guarantee against under insurance for eligible farm buildings which can help further protect clients if they have a total loss following an event,” said Whitelock.
She is not in the underwriting area and couldn’t comment on the financial details behind the flood coverage but said for her firm, flood cover in the policies is a “non-negotiable.”
“So when looking at our policy structure, we take a look at how can we fit that in and make sure our clients are protected while still being affordable,” said Whitelock.
She said they frequently receive flood claims, including some from farmers in the Kimberley Region.
“We see a broad range of impacts from floods,” she said. “So we’ve got buildings, vehicles, equipment and livestock inventory - to name your standard property that’s going to be damaged in flood.”
However, Whitelock said the types of flood damage can be “vastly different from one farm to the next” mainly because the agri clients they insure run very different businesses. In fact, even when the farm businesses impacted are similar, the damage claims are unlikely to be the same.
“Even when it looks the same, once you start looking at it more carefully, everyone is different,” she said.
The impact of the floods has varied considerably across the agricultural sector. Some farmers have suffered a great deal.
According to an ABC news report, 2022’s record rainfall led to a poor harvest for farmers who grow peaches, nectarines, plums and apricots in the NSW Central West and Riverina.
In Tasmania, wet weather severely impacted some potato farmers. One farmer reported losing 2,000 tonnes of potatoes and seed to the wet.
In response to the heavy rainfall over eastern Australia pushing hay prices up, Achmea released a statement encouraging agribusinesses to doublecheck their policies and ensure that their coverage reflects the market increases.
However, outside the flood impacts, Whitelock points to positive statistics.
“The agri sector was on track to have a near record of $85 billion [total value of gross ag production in Australia] in 2022-23, which is close to the record [set] in the previous year,” she said.
Whitelock described this as “really positive” especially given the recent struggle with flood and before that, long years of widespread drought.
Whitelock said this shows that agribusinesses and their operations are dynamic, growing and evolving. However, she offered another reminder for farmers and their brokers to make sure their business’s insurance levels and risk management reflect this growth.
“With growth, you need to make sure that you have an adequate degree of protection,” she said.
Whitelock’s firm recently teamed up with the Angus Society of Australia (Angus Australia) to offer a cadetship to its younger members. According to its website, Angus was established in 1919 to promote the delivery of innovative programs that enhance the value of Angus cattle and Angus beef products.
Through the cadetship, one successful applicant will be given a four-week placement to gain practical experience at Achmea Australia.
