Written by By selling some vitally necessary insurance to your suppliers, you enhance the potential financial resilience of such farmers. Moreover, by using innovative insurance and risk management solutions, we can prevent the risks or deal better with the consequences of loss.
Improved relationships, sustainability and financial resilience between actors in the supply chain
Input producers and suppliers (chemicals, fertilizers, seeds) and food manufacturers have relations with many suppliers and buyers. Most of their success depends on how much buyers can buy or how much suppliers can supply at a competitive price.
It is increasingly important for such industries to find new access points to farmers, diversify their revenues, facilitate the supply of more crops and livestock raw materials, and develop and retain crucial buyers and suppliers.
Many external factors, including catastrophic weather events or epizootic diseases (drought, bird flu, African swine fever), could lead to individual or even massive breach of contract obligations by farmers, resulting in financial losses.
Partnership through affinity insurance
Affinity insurance and risk management services will help you strengthen your relations with counterparties and make such interaction less risky and beneficial for both parties.
Affinity is insurance solutions distributed via third-party providers who are not insurance distribution specialists. An affinity program brings multiple benefits for any enterprise requiring food manufacturing or agricultural inputs supply.
Since the pooling of insurance enquiries into one affinity channel creates risk diversification and impressive business volume for the insurance company, leading to additional substantial discounts or more extended coverage. In other words, a farmer will buy better insurance from you compared to buying individually and directly from an insurer. Moreover, an insurance policy can be fully granted to some key customers.
Examples of such solutions are:
Insurance products can be embedded into the main product and free for a farmer or at a substantial discount, as it will be fully or partly sponsored by your company. It will help differentiate you in the market and incline a farmer to buy more main products. Moreover, cross-sales of insurance policies is one more point of communication of your sales staff with potential and existing clients.
Examples of such solutions are:
Some crops are difficult to grow to achieve the required quality or quantity (e.g. starch potatoes, rapeseed, malting barley). By having a good policy sold or sponsored by crops or animal buyers, a farmer is more confident and motivated to grow a higher amount of such crops/animals for further processing.
By selling some vitally necessary insurance to your suppliers, you enhance the potential financial resilience of such farmers. Moreover, by using innovative insurance and risk management solutions, we can prevent the risks or deal better with the consequences of loss.
For example:
Using innovative insurance solutions and IT tools helps achieve maximum results from selling insurance policies to policy sales to farmer customers.
This article is a part of our Foodprint publication focusing on issues and risks facing the Food & Agriculture industry. Read the publication and learn more about insurance solutions and the growing importance of risk management and alternative solutions like parametric insurance.
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Alma Ribanovic
Group Practice Leader Affinity
T +43 664 962 40 17