8 FARM NEWS
JUN/JUL 2019 • farmers-mart.co.uk
GROUNDBREAKING CROP
YIELD SAFETY NET LAUNCHED
Farmers can now protect themselves against poor crop yields with a groundbreaking
insurance policy that will compensate them for production shortfalls.
CROP Shortfall Insurance, from
rural insurance specialists Lycetts
and Farmers & Mercantile Insur-
ance Brokers (FMIB), will automat-
ically trigger pay-outs to farmers
if extreme weather causes yields
in their region to fall below the
historic average. The policy is Brit-
ain’s first ever to insure shortfalls
in cereal and oilseed rape crops.
‘ there is
increasing demand
for financial
protection against
burgeoning risks
’
“At a time when arable farm-
ers are facing increasing market
volatility, unpredictable weather
patterns, along with uncertainty
over post-Brexit subsidies, there
is increasing demand for financial
protection against burgeoning
risks,” said Rupert Wailes-Fair-
bairn, Rural Divisional Director,
Lycetts.
Crop Shortfall Insurance can
cover either a farms’ total crop
output or individual crops, such as
winter oilseed rape, winter wheat
or winter and spring barley.
Underwritten with capacity
rated AA (very strong) by Fitch
and Aa3 (excellent) by Moody’s,
the policy indemnifies farmers for
up to a quarter of the shortfall of
‘ Crop Shortfall Insurance
can cover either a
farms’ total crop output
or individual crops
’
their projected crop production
(sum insured) for the harvest year
in question.
The index policy is based on
DEFRA data, with a deductible of
either 10 or 15 per cent of produc-
tion. The payout is calculated on
the reduction in output volume,
based on the fall in regional yield
for the harvest year, relative to the
regional yield over the last eight
years.
FMIB Will Kendrick
Unlike traditional insurance,
where insurers must survey the
damage, it allows for a quicker,
and more objective, claims settle-
ment process.
Will Kendrick, of Farmers & Mer-
cantile Insurance Brokers (FMIB),
added: “The feedback we’ve been
receiving for some time from our
agricultural client base is that sec-
tor volatility is having a seriously
detrimental impact on long-term
planning, investment and business
sustainability.
“Crop Shortfall Insurance offers
peace of mind, sitting at the heart
of urgently called for risk manage-
ment solutions to help mitigate
the worst excesses of this volatile
environment.”
Lycetts and Farmers & Mercan-
tile Insurance Brokers (FMIB) are
both part of the Ecclesiastical
group of companies.