The abovementioned products are all different in terms of the perils they cover and their areas of operation.
In addition weather derivatives are available to manage a number of weather related perils.
Clearly, leading up to the current broadacre season there was a lot of marketing activity by the insurers and their intermediary partners. Notwithstanding this activity, we understand that less than 150 growers actually purchased a MPCI product from the above insurers. So if we assume there are approx. 25,000 broadacre growers that is a very small participation rate i.e. 0.6%.
We remain somewhat concerned about the level of interest being shown by farmers in MPCI. This begs the question do the majority of farmers actually want MPCI or is it really a niche product for a small proportion of growers?
If you listen to the marketing hype, growers are desperate for MPCI – but they didn’t turn up in droves to the various grower forums and shed meetings nor did they inundate the insurers with requests to provide MPCI quotes.
So it’s definitely time for some soul searching and it has to start with the grower and their requirements. Until the insurance market really understand what growers want there will continue to be a mismatch between the grower’s expectations and product requirements and the MPCI products the insurers offer.