How farm consolidation is putting pressure on coverages

It’s not just Canadian P&C brokerages and carriers involved in rapid consolidation: Your farm insurance clients are likely experiencing it, too, speakers said recently during the Insurance Brokers Association of Alberta’s (IBAA) convention in Banff, Alta.

“It’s a bit like our business, where you’re seeing consolidation,” says Jean Gauvreau, vice president of business development and branch operations at Portage Mutual. “So, farm operations are getting larger; they are getting more complex.

“For sure you are seeing that diversification because farms want to increase their revenues, but it’s putting pressure on coverages.”

For Gauvreau, coverages aren’t necessarily keeping pace with the rapid technological changes on the farm side. While technology is supporting farmers to become more efficient, it’s adding to the complexity of risk.

The sector is also seeing higher total insured values (TIV), creating challenges for carriers around capacity — “just between equipment and buildings and some of the operations that we participate on [with subscription policies],” Gauvreau says.

“I would say products are evolving, but I’m not sure as an industry we’re doing the best job in keeping pace with coverage,” he says. “So, we have to modernize the farm offering, I think, as a group of companies.”

Stacey Mills, vice president of mid-market commercial lines at Wawanesa Insurance, also spoke on the commercial challenges panel. She notes products such as seedman’s E&O, which haven’t been offered in past, are now available in the marketplace. Seedman’s E&O protects businesses involved in the seed trade, such as growers, distributors, and seed certifiers. The proliferation of the products has some carriers thinking of how to simplify the product offering.

For Wawanesa specifically, the carrier has three farm products and plans to consolidate them into one simple product.

Rosa Nelson, vice president of sales and business development for Intact Insurance, agrees with Gauvreau that farms are becoming more sophisticated and consolidated, with a lot of operators much larger than they have been in the past.

“You’re seeing them use a lot more technology to operate and to run their business, and that comes with things like cyber,” Nelson says. “So, now you have to look at challenges that maybe we didn’t actually look at before when it came to farm…

“There’s a whole bunch of new perils that big, massive farm operations now have to look at, even when it comes to livestock if there’s livestock coverages…,” she says. “[Farm insurance has] got a lot of nuances and sort of some interesting developments that maybe we hadn’t seen 10 years ago.”

Tradition Meets Technology: Scaling a Family-Owned, Community-Driven Brokerage Image

Insights Paid Content

Tradition Meets Technology: Scaling a Family-Owned, Community-Driven Brokerage

How MIB is growing across Canada without losing the values, relationships, and local trust that built it.

By 

Sponsor Image

Chelsa Materi, chief growth officer at Sandbox Mutual Insurance, says she’s seeing a lot of competition in the space, “in particular with brokers and MGAs trying to set up farm-specific programs.

“So, I think everybody is trying to create that winning suite of products and coverages that will capture some of the market and also spread some of the really large TIVs that are out there.

“I’m not sure if anybody has got it 100% right, but I’m curious to see how it evolves.”

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.