“The level of sophistication at which farmers are operating, and have had to learn to operate, is a lot further ahead than most people realise.” This causes challenges for brokers and insurers in terms of creating the right products to keep pace with the market, says Richards. “Farming is well ahead of the insurance market,” he says. “It’s up to us to keep up, but often we struggle to respond to the level of sophistication at which they operate, and the rate of change that’s happened in the sector. “Regardless of whether they’re insured or not, farmers manage risk every single day. Because of that, they have a comprehensive understanding of risk, and are the best risk managers you’d find in Australia.” For brokers, that sophistication means risk conversations must now extend beyond traditional asset schedules and seasonal peril exposures, into new realms, new risks and, potentially, new rewards. Automation, efficiency - and dependency Agricultural technology – agtech – is a hugely important part of farming today, and it’s big business. More than $318bn has been invested in agtech globally in the past decade, while in Australia alone in 2024, $3bn was invested in this space. “And when that reliance increases, it introduces a new type of exposure that maybe historically hasn’t been front of mind for farmers or for insurers.”
everyday operations, often helping improve safety and productivity – particularly important in a sector facing labour constraints.
However, technology adoption can also introduce new risks and vulnerabilities that need to be considered.
Ammon Mackie, General Manager of Commercial Business Transformation at Allianz Australia, says, “Those tractors and harvesters are so technologically driven now that if something fails it creates huge knock-on problems for the farm.” A system outage during a narrow harvest window can have immediate income consequences because supply chains often aren’t able to get replacement machinery in good time. Richards says, “If there’s been an incident on the farm and equipment needs to be replaced or repaired, the timeline for that is often quite disconnected from the reality. Because if they have an incident at the very start of harvest in broadacre operations, the equipment is critical, and it’s very unlikely that they will be able to secure another machine to replace and get through their own harvest, which then has a direct impact on their income. “Not only do they need to get the crop off, but now they’re watching their income and cash flow basically drop off every day the crop stays exposed to the elements. And if they miss that window, they are directly hit.” In this situation, business interruption and continuity planning take on greater relevance. Cyber resilience moves closer to home As well as those risks that may be considered more traditional – despite the technology overlay – farms are facing a new risk that a decade or so ago wouldn’t have been a huge consideration.
And investment is translating into practical, operational change on farms.
Cybersecurity.
“If we were having this conversation ten years ago, uptake was relatively minor, and a lot of what is being talked about would have sounded fanciful,” says Tom Gilmore, Head of Farm Underwriting at Allianz Australia.
For many farmers, this represents a meaningful shift in the way risk is understood.
Phoebe Twiggs, Head of AI and Data Science at Allianz Australia, says, “Farmers have gone from managing primarily physical risks to now managing cyber and digital risk as well. It’s a complete shift in mindset.” One in five farms is hit every year with at least one cyber event, and agriculture is now a top-six sector for data breaches in Australia. Richards says, “By virtue of that sophistication and the way that farmers are managing risk, they’re also becoming more reliant on technology – whether that’s through
“Today, you’ve got automation on tractors, you’ve got all the precision ag, and drones that are monitoring crops and livestock.
“Virtual fencing has just been given the green light in South Australia, and that was the final state or territory to do so. A decade ago, when we talked about virtual fencing, you would have said, ‘No way.’ And that’s the big difference today. It’s here.”
Automation, precision agriculture, connected machinery and remote monitoring are increasingly embedded in
5 A NIBA Brokers’ Guide: to farming the future
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