What are the top insurance concerns of Canadian farmers?

The agriculture industry has shifted dramatically – but not insurance

What are the top insurance concerns of Canadian farmers?

Insurance News

By Gia Snape

Canada’s agricultural industry has shifted dramatically over recent decades. However, change within agriculture insurance has not kept pace, according to one managing general agent (MGA) catering to the sector.

Mass consolidation, the next generation of farmers taking over, and advancing technology have made an indelible mark on agriculture, according to First Acre Insurance CEO Robin Shufelt (pictured).

“We haven’t addressed those changes in a full way,” she told Insurance Business.

“The farms are getting bigger, they’re purchasing each other, and they have more expensive equipment. All that drives up their limits.

“We talked to farmers who had four different policies with different carriers, which became cumbersome and it’s a challenge for them. We also found that a lot of the insurance offerings that were out there today weren’t necessarily specific to the needs of farmers today.”

Top insurance concerns for Canadian farmers and farm businesses

Broker and farmer feedback informed the development of First Acre’s new agricultural platform.

According to Shufelt, insurance to value and having the right tools to address their risks were two significant concerns expressed by farm clients. 
“Equipment was a big one. All the big equipment they use is expensive, and if one fails, from a farming perspective, [equipment] can be quite challenging,” she said.

“But they’re also finding is that they would have a piece of equipment on day one, but in a year, their current provider couldn’t insure it anymore because the value had changed, and so that was causing problems as well.

“Farmers are also entrepreneurial, and they will run different businesses as well as their farms,” she continued.

“We wanted to be able to cover the majority of their risk, so we looked at writing a combined policy that would do their personal - like their dwelling, their farm - and then if they have some commercial as well, so they’re better protected.”

Finally, Shufelt acknowledged that a younger generation of farmers has different expectations as insurance consumers.

“Whether it’s with on-demand services like Amazon, there’s more aptitude and desire to use digital tools and technology with farming specifically,” she said.

“Farmers have often used technology, but it’s expanding more and more now given the connectivity of services, so it’s that expectation of being able to be more involved with the information of an insurance policy and having more tools available to them and to the brokers that are servicing them as well.”

Evolving to serve the 21st-century Canadian farmer

First Acre recently rolled out an agricultural insurance platform aimed at providing better asset protection while offering brokers a seamless and efficient way to arrange precise cover.

The startup, which operates in Ontario, Manitoba, Saskatchewan, and Alberta, is a joint venture by Red River Mutual and Commonwell Mutual.

“They (Red River Mutual and Commonwealth Mutual) both write agriculture insurance within their areas, but they were finding that the agricultural spaces were changing so much, and they needed to be able to address that,” Shufelt said.

The two mutual insurance companies wanted to innovate in the agriculture space and offer new insurance products that addressed the evolving needs of the 21st-century farmer.

Shufelt explained: “A lot of wordings and farm are adapted from commercial and personal lines. Our wordings and products are specific to agriculture, so everything’s been written with the agriculture sector in mind.”

Moving forward, First Acre wants to continue to iterate its platform based on feedback from brokers and farm clients.

“Now that we’re live, we certainly haven’t solved all of farmers’ problems or those of the brokers that work with them,” she said.

“[We’re] excited now that we’ve launched to get that live feedback, start to incorporate [it] and continue to adjust to meet the needs of our customers.”

Are you a broker who works with agriculture industry clients? Tell us your perspective on this issue in the comments below.

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