With the cyclone season fast approaching, Queensland farmers affected by tropical cyclones are encouraged to get involved with a Queensland Farmers’ Federation (QFF) project testing agricultural insurance products.
QFF Project Manager Ross Henry said while the Bureau of Meteorology’s 2018-19 Tropical Cyclone Outlook showed a 60% chance of fewer tropical cyclones than usual are likely in the Eastern Australian region this season, farmers should be proactive and continue to improve their natural disaster resilience.
“Insurance is one way to offset this risk. Through the Queensland Government’s ‘Drought and Climate Adaptation Program’, QFF and industry members, together with the University of Southern Queensland and Willis Towers Watson, have assessed and modelled insurance options for farmers,” Mr Henry said.
“Known as parametric or index-based insurance, it differs from traditional forms of insurance in that payouts are not determined by actual losses for an individual farm and do not require proof of damage, rather, a payout results if a pre-agreed trigger event, such as a cyclone, occurs.”
“Parametric insurance has the potential to be used for a number of climate and weather risks, as long as there is robust data; for example, rainfall, temperature and wind speed.”
In order to progress the agricultural insurance products, QFF is looking to work with farmers who want to apply the product on their farm and get a real-world understanding of the insurance options.
“QFF has done extensive work on natural disaster recovery and resilience and understand the potential of natural disaster insurance,” Mr Henry said.
“Case study examples will help us understand how this insurance works on farm and give us an understanding of the pricing. Farmers affected by tropical cyclones are encouraged to get involved.”