A multi-peril crop insurance provider is relaunching as a farmers’ mutual.
Latevo is transitioning to a cooperative-like mutual model with 100% grower ownership, where policyholders will be entitled to receive a share of company profits at a cost of $500 for insuring 1000 hectares or less, $1000 for 1000-3000ha, and $2000 for more than 3000ha.
The new structure would also allow the insurer to offer multi-year contracts to clients.
Andrew Trotter, Latevo director, said the makeover would “allow growers to have a share in the upside in the good years as well as have cover in the years they need it,” as he noted the continuing strong demand for farm income insurance products, Fairfax Media reported.
“This year we have received orders for over 600,000 hectares,” Trotter said.
To continue developing a viable income protection sector in Australia, Trotter said insurance brokers as well as other farm advisory businesses should be educated about the benefits of crop insurance and other risk management products.
“It is about changing the mindset of the support industry, I think growers understand how useful it could be as a tool but more awareness is required across the entire sector,” Trotter told the news agency.
The insurer will be conducting training courses across the country next month to inform people more about the concept.
Trotter said he was also looking to change perceptions around the cost of farm income protection.
“The price is far more affordable that what most growers have been historically told," Trotter told Fairfax Media. “Farm income protection with us starts at $15 a hectare, that's the same price as a summer spray, it is not expensive, especially when you see the benefits it can deliver. Growers that have been in the program now say they won't plant crops without the protection as growing crops in the current climate as it is just far too much of a risk to take without laying some it off to the global insurance community.”