LATEVO International will join Allianz Australia to bring a Multi-Peril Crop Insurance (MPCI) to Australian farmers this year.
In what it describes as a "landmark achievement for Australian agriculture", Latevo International announced today that it was committed to offering a MPCI product for the 2013 season.
The announcement comes after the company received Allianz Australia's backing in the scheme.
Latevo International chief executive Andrew Trotter said past MPCI insurance products available in Australia had been based on unsustainable district yield averages which penalised better operators in terms of premiums.
Latevo is a revenue-based insurer.
"Having the backing of Allianz means Australian farmers can have certainty about cover for their revenue, whatever the season brings," Mr Trotter said.
He said Latevo's MPCI product could provide the financial confidence growers require.
The partnership between Latevo and Allianz was facilitated by world-leading re-insurance broker Guy Carpenter.
Member for South West Region Nigel Hallett said the launch of a crop insurance product in Australia was one of the single biggest breakthroughs that agriculture had seen in the last generation.
"An insurance product of this nature will not only help farmers plan beyond one year, it will allow growers to stabilise their businesses and potentially finance expansion or the acquisition of farm land," Mr Hallett said.
"I have no doubt that the guarantee of a positive net annual income for drought-plagued grain growers will strengthen the viability and sustainability of our rural communities while also restoring confidence in WA agriculture."
Mr Trotter said typical cover cost was anticipated to be between $15 and $30 per hectare.
The jury is still out on whether that will be too expensive for grain growers to take up, with many growers continually questioning the cost of a MPCI product.
Latevo has already offered a limited release program for this year Australia wide and Mr Trotter said there were still spots available.
Mr Trotter said all farmers were encouraged to submit a production audit so they could be eligible for cover in 2014.
Farmers can choose the level and type of cover they want with pricing determined by the individual production audits.
The production audits will be independently completed by RSM Bird Cameron.
Latevo is the first company to guarantee a MPCI product for next year.
Global agri-corporate business, Swiss Re and its partner The Climate Corporation (TCC) continue to push for Doppler Radar Technology to provide a more detailed report on WA weather patterns.
Swiss Re and TCC have gone quiet since their trip to WA in May, raising questions about whether they will have a product for 2014.
Last month, Mr Hallett wrote to WA Agriculture and Food Minister Ken Baston regarding a Crop Mitigation Insurance (CMI) product and asking the State Government to invest $2 million in setting up two Doppler radar stations and provide soil mapping data through Landgate.
Mr Hallett also reiterated the urgency of the matters.