CBH set to release crop insurance model

25 Feb, 2011 02:00 AM
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CBH is set to release its own crop insurance model within the next two months.

Yet to be totally finalised, the new insurance concept would be more broadly based compared to those already on the market and would offer an all-peril kind of coverage.

The cover would ultimately be far more extensive than the typical fire and hail type cover available to WA growers now.

CBH's chief risk officer Rob Maurich said the product should be ready to roll-out within the next couple of months.

"We haven't absolutely signed off on a product and pricing as yet but we're definitely still working on that," he said.

"Hopefully it'll be out there in the next month or two in time for seeding and before next harvest."

Mr Maurich said until CBH actually got to the point of signing off on the model he couldn't say too much about the product itself and what type of pricing it would require but he had hoped to finalise that in the coming months.

It was industry talks which surrounded the possibility of multi-peril crop insurance earlier in 2011 (MPCI) which gave CBH the idea of the crop insurance.

Although CBH was well equipped and successful in numerous other areas of insurance cover Mr Maurich said the co-operative recognised its expertise around those various types of insurance products and came to the conclusion it could lend a hand.

"We were particularly happy to do so for the WA marketplace," he said.

"We've been working through various types of models with different insurers and we're getting towards the end of that process.

"It's about being able to bring the expertise of all the various parties together to help develop this product.

"We recognised a need and we're hoping to fill it."

He said CBH was very keen to develop the product for growers in WA and to try to help them through the tough season by giving them another insurance option.

It came as good news for growers especially in the Shire of Kent who lost large percentages of their barley and canola crops to frost late in the 2010/11 season and were last week told their shire had been declared water deficient.

The last water deficiency declaration was in 2004/05 in the shires of Ravensthorpe, Esperance and Lake Grace and this year it was just an added burden.

WAFarmers has thrown its support behind the cause and its risk mitigation committee president Bob Iffla said the prospect was very exciting for all WA growers.

"Negotiations are still being finalised and we hope to be able to release the full details soon," he said.

"The product will look to mitigate risk and recover the costs of cropping.

"The product won't insure the whole thing but it may be an absolute winner."

The Pastoralists and Graziers Association's (PGA) western graingrowers chair Rick Wilson was also supportive of the news.

He said the PGA had always been a supporter of commercial crop insurance products as long as they were initiated by industry and not government bodies.

"It's always been our view that insurance of this kind is beneficial to the grower," he said.

"We applaud the foresight of CBH but as we haven't seen any details yet we won't get ahead of ourselves."

CBH has been working on the project for almost six months and continues to engage with a range of stakeholders including the WAFarmers risk mitigation committee, Department of Agriculture and Food representatives, members of government, consultants and bankers to develop and roll-out the new insurance product.

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READER COMMENTS

John
25/02/2011 9:17:33 AM, on Farm Weekly

So who pays when payouts are more than premiums paid?? and does this risk all growers money held within cbh?

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