Disaster insurance to safeguard producers’ livelihoods is likely to be offered to Queenslanders ahead of this cyclone season.
In an Australian first, the planned policies would allow property owners to insure against specific weather events or natural disasters, based around the perceived threat at their exact location.
Rather than insuring assets on the property against damage, property owners could nominate a dollar figure they would like to receive if a severe weather event struck their area.
That money could then be spent at the property owner’s discretion, to re-plant, repair damage, pay wages or bills, or whatever is required to get back on their feet.
The Queensland Farmers’ Federation has been working with Willis Towers Watson, a leading global insurance broker, and the University of Southern Queensland to develop the insurance products.
QFF project manager, Ross Henry said the group was investigating agricultural insurance options to cover catastrophic and extreme weather events, including cyclones, floods and drought.
“We’ve been working for 18 months to develop and price cyclone cover for Queensland, and it’s a pretty exciting step,” Mr Henry said.
“It pays out on an event happening, not like traditional insurance which pays on the damage caused through loss assessment.
“It is a simpler form of insurance and more transparent, either the event happened, or it didn’t. There is no grey area.”
Mr Henry said farmers could use the insurance to protect against the potential impacts of cyclones, including loss of yield, crop damage, crop loss and recovery works. Global brokers have expressed an interest in the Australian market and policies may be available ahead of this cyclone season.
Austchilli Group director Trent De Paoli, who operates an integrated farming and processing business in Bundaberg, is excited at the prospect.
Mr De Paoli farms chillis over 500 acres and has 300 acres of avocados in Bundaberg and Childers.
He began investigating insurance options after a significant hail storm hit Bundaberg three years ago.
As a former Nuffield scholar, he also spent time in North America looking at multi-peril crop insurance and believed it could be brought to Australia.
He said the insurance could protect the livelihood of growers and strengthen the sector for future generations.
”Over the last decade, I’ve seen too many young people leave the farm due to extreme weather events. They don’t have a lot of equity behind them, so with a significant weather event, it’s all over.”
It is a simpler form of insurance and more transparent, either the event happened, or it didn’t.