The Land Bank insurance branch in cooperation with TWK Agri has developed a new asset insurance product tailored for the agricultural sector. It also caters to the needs of small and emerging farmers.
Kobus Stapelberg, manager or corporate insurance at TWK Agri, said their research showed general comprehensive insurance which was offered over the last 10 years was too expensive, especially for emerging farmers and small commercial farmers.
“We realised that it was needed to segment the market.”
Dini Nondumo, MD of sales and distribution at Land Bank Insurance Company (LBIC) said the products were developed after farmers complained that there is no commercial asset insurance available to them.
LBIC launched the product during the Nampo Harvest day. Brokers will sell the products from July, after receiving training.
LBIC has developed the new products on three levels: big-sized farmers, medium, and small-scale commercial farmers and emerging farmers.
According to Muzi Dlala, executive operating manager at LBIC, individual emerging farmers usually can’t afford insurance. That is why the new insurance products can be offered to a group of emerging farmers sharing assets. In that way everyone’s individual rights and interests are looked after.
Dawie Barnard, CEO of Raddix Insurance Brokers, says brokers should make a mind shift towards emerging farmers. They can play a role in farmers’ success by providing them with information.
Middle-sized farmers will have access to a more general product. It is more flexible to enable farmers to structure their insurance.
According to Maniki Rakgalakane, MD of LBIC, these farmers usually want immediate compensation for any losses.
They need affordable insurance premiums, but the policies will also include premium insurance. The premium can be part of their production bill and can be paid after the harvest.
According to Stapelberg, large farmers manage their risks well and can budget for expected losses. However, unexpected and unforeseen losses can cripple even these farmer.
Dlala says large farmers will be handled individually.