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Agribusiness

Global food and agricultural leaders face a heightened risk environment, including unpredictable crop yields, fluctuating consumer demand, and unforeseen transportation bottlenecks. Marsh can help you navigate these risks to sustain growth and profitability for your business.
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Today’s global food and agricultural companies face heightened pressure to be increasingly integrated across the value chain. The application of new technology has helped businesses meet this demand, leading to improved productivity and efficiencies across the supply chain.

Although this digital transformation offers new opportunities for innovation, reach, and scale, it creates new vulnerabilities amid the myriad of risk-related challenges already present across the industry.

The growth of yield has slowed to an unsustainable rate in the face of a rapidly growing global population. Coupled with increasing environmental concerns such as land use issues and extreme weather impacts from droughts and hailstorms, and unforeseen transportation bottlenecks arising from the pandemic, companies within the agricultural sector are exposed on many fronts.

Based on our agricultural industry expertise, our dedicated risk management professionals can assist your business with creating a proactive plan that can help support sustained growth, identify opportunities for investment in new technologies, and lower your total cost of risk. Working together, we can help you protect your people, your property, and your bottom line.

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FAQ's

Each business faces risks unique to their day-to-day operations. However, the agricultural industry as a whole is confronted by several major areas of risk, including:

  • Growing population: The world’s population is expected to grow from 7.5 billion to 10 billion by 2050, requiring at least a 70% increase in the total availability of food. However, heightened ecological concerns will make it difficult to expand production utilising traditional methods. Agricultural suppliers must find ways to innovate across multiple activities in the supply chain to boost productivity, total yield, and market access.
  • Climate change: The increasing unpredictability of weather — droughts, hailstorms, floods, and wildfires — has created new vulnerabilities as agricultural businesses seek to adapt to fluctuating consumer demands in the face of unsteady crop yields.
  • Disease: Epidemics and pandemics, whether human (COVID0-19) or animal (African swine fever, avian flu), have greatly impacted the livestock industry and caused serious supply chain disruptions.
  • Cyber: Increasingly, the internet of things (IoT) is being leveraged throughout the agricultural industry for enhanced visibility and transparency across the supply chain. However, this growing dependence on IoT-enabled systems creates new food safety and distribution concerns in the event of an outage or a malicious attack. Businesses will need to create processes to continuously monitor their cybersecurity and replace lost goods, produce, or livestock if a failure cannot be prevented.
  • Environmental, social, and governance (ESG) expectations: The environmental and social credentials of agriculture producers are increasingly important to food manufacturers and the end consumer. ESG expectations create a reputational risk for farmers and commodity buyers that needs to be carefully managed.

Agricultural companies need to create a proactive risk management program that addresses these risks. Marsh’s specialists can help you identify the steps to take to mitigate the impact of each of these threats and the relevant insurance coverage to reduce your total cost of risk.

Businesses within the agricultural industry possess specialised properties and assets that require specialised insurance coverage to reduce risks to growth and profitability. Some of the most crucial policies include:

  • Crop insurance: This protects farmers and agricultural producers against the loss of crops as a result of extreme weather, such as floods, hail, and drought, and the loss of revenue due to fluctuations in the market..
  • Farm structure insurance: In the event that a structure such as a barn, silo, or coop is damaged in a storm or from other natural causes, farm structure insurance provides assistance in rebuilding to minimise downtime and related production losses.
  • Livestock insurance: There are several different types of livestock insurance — the variety of coverage your business will need is dependent on the animals you own and the purpose they serve.
  • Liability insurance: There are many types of liability insurance available, including coverage designed to protect people visiting your farm or the property of others if damaged due to your farm operations. It can cover bodily injury caused by livestock, illness caused by products sold at farmers markets, agratainment liability, fire legal liability, employee health and safety, and accidental pollution.
  • Weather insurance: The increased availability of weather insurance options allows farmers, who tend to have an intimate understanding of their specific weather exposures, to insure against adverse weather events such as excess or deficit rainfall or temperature at their precise geographical location which can either complement existing crop and other insurances or act as  a stand alone form of protection.

Although the assets each agricultural business must consider in their risk management approach significantly vary, more specialised policies such as the above can help mitigate losses and address risk vulnerabilities across the industry as a whole.

A comprehensive approach to risk management not only includes specialised coverage for agricultural-specific assets, but also accounts for common business risks such as:

  • Cyber: Any computer-based processes used for day-to-day operations are at risk of being hacked. As artificial intelligence and autonomous technology become increasingly widespread in the agricultural industry, leaders will need to consider what coverage and risk management strategies are needed to protect the information and processes potentially being exposed to third-party actors.
  • Workers’ compensation: The role of workers’ compensation insurance, where available, or similar coverages is complex but vital within the agricultural industry, as the sector is one of the largest in terms of annual workers’ compensation claims. Employers will need to mitigate the risk of and plan for claims as a result of incidents such as vehicle hazards, heat exposure, slips and falls, and any injuries sustained while working with equipment.
  • Business interruption: Business interruption insurance covers the loss of income suffered after a disaster or adverse incident. Proactive planning against business interruptions should extend to pandemic-related closures and losses and account for coverage against livestock diseases including African swine fever and avian influenza.

For today’s agricultural businesses, maintaining operations is essential to remaining profitable and keeping up with high global and local consumer demands. At Marsh, we can help you create a proactive risk management program to mitigate risk, defend your assets, and invest for the future.

“Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”