Insurance package offers cost savings
CHEAPER insurance is on the cards following the launch of a new package tailor-made for well-run farm businesses.
Quality Managed Risk was developed and is run by Q Farms, a company formed by a group of agricultural insurance specialists and farm business consultants Andersons.
Q Farms has teamed up with insurers Norwich Union in a bid to grab a big share of the £600m a year farm insurance market, currently dominated by NFU Mutual.
Key to the concept is a "bespoke" service. This allows the degree of risk to be assessed for individual farm businesses, allowing premiums to be pitched accordingly, says Alan Douglas of Q Farms.
Such detailed assessments, which will be carried out by Andersons, also enable the company to offer new and improved cover, says Mr Douglas. This includes pollution, contamination of produce and grain infestation, and reduced cost TB cover, even in hot spots in the south-west, he explains.
Farmers who adopt quality assurance practices, such as those outlined in the Assured Combinable Crop Scheme or Unigates superior stockmanship scheme, will be favoured targets. Marketing agents Agricredit and ABN will supply names of likely customers.
"The traditional method of pricing results in bland averaging of premiums, with the quality farmer paying over the odds, as insurers seek to cover the cost of insuring the high risk farmer." Typical savings of 40% should be possible, adds Mr Douglas.
Providing this sort of service is not cheap, Mr Douglas admits. For that reason, only farms spending at least £2500 a year on insurance premiums – typically those with 50 plus cows or at least 142ha (350 acres) of arable – will be targeted for now.
But plans are to develop a cheaper system which will allow smaller farmers to benefit too, he points out.
Market leader NFU Mutual, which claims 65% of the UK agricultural insurance market, says it launched its own risk management concept five years ago.
"This tries to mirror what we have been doing for some time," said a spokesman. "We already provide detailed individual farm assessments. Farmers can recoup the cost within a couple of years, after which they can make real savings on their premiums."