AgriRisk keeps its clients informed of changes in the various insurance markets, along with information about how the wider picture may affect their business.
THE GENERAL INSURANCE MARKET
Cyclone Oswald and its subsequent flooding and the Victorian Fires will cost the insurance industry some $950m in claims which will place further stress on the general insurance market, especially property lines. Clearly flood cover will become more topical and insurers will continue to refine their flood models to ensure their rates are adequate.
THE RURAL INSURANCE MARKET
Storms and floods have again impacted on this segment of the insurance market so there will be increasing pressure on property insurance lines including Farmpack. We are also encountering significant difficulties securing coverage for agricultural contractors with “high value” machinery inventories such as cotton pickers etc. These have now become very difficult and expensive to insure and many insurers have introduced quite onerous fire risk management conditions on their policies.
THE CROP INSURANCE MARKET
The crop insurance offering to growers remains limited in Australia in terms of product type and range and we haven’t seen any movement in the market to suggest that this will change in the near term.
The main market segments are outlined below;
The cereal crop insurance market remains quite competitive and buoyant so we don’t see any particular coverage or pricing issues for the upcoming winter crop insurance season.
Crop losses have been relatively low this season notwithstanding a flurry of early hail across a number of growing regions. Assuming the current crop comes off without any further significant losses we don’t anticipate any coverage or pricing issues for next season.
Horticulture and Viticulture
The horticulture and viticulture markets continue to be very difficult for insurers and growers alike. Coverage is limited and expensive which impacts on the number of growers that purchase insurance. When losses are then encountered the insurer’s profitability is undermined as they only have a limited premium pool. We haven’t seen anything in the market that will change this current scenario – so it will continue to be difficult for both growers and insurers.
The Forestry market has had a tough year in terms of fires in both Victoria and Western Australia After two wet seasons, fuel loads have been relatively high so once ignited, fires have been difficult to control. Insurers will therefore pay a number of multi million dollar losses this season which will make them focus on their rating methodology rather than competitive forces which have driven premium rates down over the last few years. So we would anticipate a re-rating of some policies this season.