Devastation from frost bigger than fire and hail
Andrew Gregor, AWB
Frost inflicts significantly more devastation on Australian crops than fire and hail, and some believe its prevalence is increasing.
The CSIRO estimate losses from frost events in broadacre agriculture to be between $120 - $700 million per year. This far exceeds the annual loss insurance companies estimate from fire and hail which is around $80 - $120 million every year.
While fire and hail insurance has been a common risk transfer solution for growers over the years, insurance against frost has been less common and typically some insurers include as part of an extensive multi-peril policy which covers perils often not relevant to individual broad acre enterprises yet increases premiums significantly.
This year, AWB has launched a new broad acre insurance policy with specific add-ons to fire and hail policies for Frost and Crop Establishment Failure. These flexible add-on covers enable growers to insure for specific risks without paying for perils that are not relevant to their business.
The response from growers to the Frost and Crop Establishment Failure add-ons has been overwhelming as it presents the opportunity to manage significant risks that were previously not viable. Growers are able to get a quote for frost and Crop Establishment Failure simply by requesting it to be added to the normal fire and hail. Premiums for frost are typically higher than for fire and hail based on its higher occurrence, which gets reflected in the rate. The financial impact on the sector is also far greater for frost than fire and hail. In fact, we estimate that the impact of frost on the sector is four times that of fire and hail. Adjustments to the premiums are calculated based on the specific location of the farm and its frost profile as well as the selected percentage of the value of the 3 crop types (wheat, barley, canola) on the property that is insured.
Quotes for fire and hail and add-ons Frost and Crop Establishment Failure are easily obtained from your local AWB Representative or visiting cropinsurance.awb.com.au and requesting a call back.
Estimates attributed to the CSIRO are contained in CSIRO report frost estimates 2016 CSIRO report
Originally published 22 June, 2018
For further information call the AWB Grower Service Centre - 1800 447 246
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