Modern agriculture has developed far beyond the farm gate. Today's agribusinesses operate in complex, technology-driven value chains, which introduce new and often unexpected risks. The message is clear: insurance models must evolve to keep up.
The 58th NAMPO Harvest Day Agricultural Exhibition was held from 12 to 15 May in Bothaville, Free State with the theme Resilience through innovation.
Speaking ahead of the invention, Hollard Insure says insurers, brokers and agribusinesses need to rethink how agricultural risk is assessed in an era shaped by automation, artificial intelligence and increasingly diverse business models.
“Modern commercial farming has expanded beyond production, while becoming increasingly precise, data-driven and technologically advanced,” says Andries Wiese, head of agriculture at Hallard.
“Innovation across the value chain has undoubtedly improved efficiency and productivity, but it has also introduced entirely new and often multilayered categories of risk.”
Below are five ways to evolve your insurance model to fit this new agricultural world:
1. Add risk to the entire agribusiness value chain
Modern commercial farming no longer ends at production. Agribusiness has now expanded into processing, logistics, warehousing, wholesale and retail.
Wiese explains that this expansion means that risk assessments can no longer be done in isolation.
“As an agricultural insurer, it is our responsibility to share information, assist and advise our brokers and clients in relation to the evolving risks as the sector evolves,” says Wiese.
He says insurers must understand new business models, machinery, technologies and delivery systems to ensure that risks are appropriately mitigated and covered across the entire chain.
2. Move from bundled policies to tailored risk solutions
Traditional agricultural insurance has often been structured as comprehensive, bundled products.
However, Wiese says increasingly personalized agribusiness models – enabled by advanced technology – are making these obsolete.
“In fact, while we need to reframe our policies and reassess them on a tailored basis, we also need to recognize that insurance is just one part of a broader risk management strategy,” he says.
This requires solutions that reflect the unique risk appetite and operational complexity of each agribusiness.
3. Recognize how technology creates new and unexpected risks
Innovation has driven efficiency changes, but it has also introduced new risks that traditional policies were not designed to cover.
Examples include:
– AI systems that manage logistics or production
– Drone use introduces aviation-related risks
– Precision farming systems dependent on data accuracy
Even small failures can have big consequences. For example, a malfunction in the navigation system could result in lost export goods and significant financial losses.
“The advent of new technology may render existing cover redundant or create entirely new risks,” explains Wiese.
4. Adapt the cover to highly specific operational realities
Modern agricultural equipment and processes often require highly relevant insurance thinking.
Wiese highlights practical examples:
– In dairy farming, advanced artificial insemination equipment such as special flasks may not be adequately covered under inheritance policies.
– In pivot irrigation systems, rubber tires are critical components, yet standard motor policies often exclude tire damage.
– Failure of such components may halt entire operation.
“These examples show why a one-size-fits-all approach is no longer effective,” he says.
5. Build holistic, multi-layered risk management beyond insurance
Wiese emphasizes that insurance alone is no longer enough.
“As insurers, we must ensure that agricultural businesses can withstand technical, financial and other setbacks, and remain productive and sustainable,” he says.
It also involves combining traditional insurance with alternative instruments and broader risk instruments – financial, operational and sometimes medical in nature, depending on the business model.
He says the goal is not just cover, but resilience: ensuring agricultural businesses can continue to operate despite disruption in an increasingly complex ecosystem.
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