Farmers Edge founded a new company called DigiAg Risk Management that offers parametric products, insurance and group benefits plans.
Parametric insurance provides pre-specified payouts based upon a trigger event, and because Farmers Edge has access to data sets from broad-acre farms, the new company is positioned to monitor triggering events in the agriculture sector.
Wade Barnes, chief executive officer of Farmers Edge, said DigiAg can offer products tailored for farmers, such as canola heat blast yield protection because of the data sets it has access to including satellite imagery, on-farm weather events, predictive crop models, as well as acreage reports.
Read Also
Farmland a buyers’ market?
WINNIPEG — The farmland market in Saskatchewan may be tilting toward the buyer. It’s not there yet because sellers still…
“This year, a lot of farmers might be insured up to around 30 bushel to the acre canola, but they’re trying to grow 60 bu. canola. They spend the money on the inputs in order to grow 60, but if they grow 35 bu. to the acre, they don’t trigger a crop insurance payment, even though for farmers that’s a little bit catastrophic,” Barnes said.
He said DigiAg will work with other private insurance companies that want to use its data analytics and site-specific data sets to provide additional insurance products.
The company is already working with insurance providers Acturis and Wawanesa Life.
“Because of these data sets they can actually reach right over to the grower and provide I would call a sort of designer insurance products to growers that can create protection over and above what the farmer has with provincial insurance. That’s never really been done before, on the back of these data sets,” Barnes said.
With better risk protection Barnes said there will eventually be an opportunity for growers to have access to better lending facilities.
“Why wouldn’t a bank provide them more operating money at a lower rate if they utilize that data and do the same risk assessment the insurance companies do. I think you’re going to see that, we’re super excited about 2022.”
He said risk management tools better suited to modern farms will help them take advantage of times with high commodity prices by reducing their risk from higher input costs.
For instance, this spring there are record grain prices, record fertilizer prices, and it’s anyone’s guess if there will be enough moisture to grow a crop.
“Farmers do not get that many chances to get a home run, high grain prices give them that ability to get the home run,” Barnes said.
“But with high grain prices, there’s a high cost to go along with it and they have to protect their downside. The insurance they go through right now just doesn’t do it.”
DigiAg Risk Management will also offer benefit plans designed for farm families and their employees.
Group benefits plans are often designed for one employer with several full-time employees, which doesn’t fit some farming models.
DigiAg will offer coverage, including dental, vision, prescription drugs, for both full-time and seasonal employees.
The plan will pool all customers to harness their buying power for a more affordable benefits package and renews as one group.
Farmers Edge recently won the Deloitte Fast 50 for 2021 for some of its new products, including a carbon offset program and the new insurance program.
