Farmers in major payout from Australian insurance first

Farmers in major payout from Australian insurance first | Insurance Business

Farmers in major payout from Australian insurance first
The first payout under Australia’s first private multi-peril crop insurance (MPCI), underwritten by Allianz, is set to be received by a Queensland farmer after a failed season.

Agricultural insurer Latevo International partnered with Allianz last year to offer the Australia-first program and, according to the ABC, only 29 farmers nationwide took up the offer.

Following disruptive seasons across the country, Latevo chief executive Andrew Trotter told the ABC that a Queensland farmer is set to receive a $944,000 payout while two farmers in New South Wales and Victoria are set to receive more than $300,000 each.

"All our clients in the western region, which are all our clients in Victoria, will receive payouts,” Trotter said.

"What that shows is our program is built so that we can deal with the statewide devastation that occurs from time to time, and that's what's so good about this concept that we do have this global insurance backing to make sure people are always paid."

Latevo’s product is designed to cover the cost of running the farm for a full-year as their website says the company “can ensure that if grain growers experience the worst-case scenario of no harvest, they break even and can start their year in exactly the same financial position as they did the year before.”

One Victorian farmer who, according to Queensland Country Life, will receive a payout from Latevo believes the insurance offers Australian farmers an important sense of security in an otherwise volitle industry.

Phillip Koschitzke said of the scheme: “Without it [MPCI], we’re faced with a catastrophic issue, with it, we’ll be faced with a loss, but it will possible to get our crop in this year without too much of a problem.”

“I’m just so hopeful that this product gets off the ground, not only just for my own business this year, but for all farming businesses in our area down the track.

“This year we saw good operators have an absolute shocker and a working MPCI will give our communities the resilience against these sort of weather events they need.”

Following warnings from the United States, where multi-peril crop insurance has never been successfully paid without the aid of a government bail-out, Trotter believes the Latevo offering is suitabily different and sustainable for the long-haul.

“We're more than happy for the government to help Australian farmers get into the program,” Trotter told the ABC.

"What differentiates this model from every previous model is the way we underwrite. We spend a lot of time truly understanding the farmer's financial position and their volatility within their business, and risk profile, just like a bank would.”