Definite trend of underinsurance in South African agriculture

Janine Noble in ITINews via CIB Insurance Administrators (South Africa): Severe weather conditions recently recorded throughout South Africa, such as the heat wave and fires in the Western Cape and erratic rainfall in the Mpumalanga and Limpopo provinces, has highlighted the urgent need for farmers to reassess their risk management processes.

This is according to Jonjon Smit, Director at CIB Insurance Administrators, who says that climate change and unpredictable weather patterns will continue to threaten the financial survival of farmers who do not have effective risk management policies in place in 2012.

...He says that underestimating the replacement value of farming equipment, combined with a failure to regularly review their policies, means that the percentage of South Africa's farmers who are underinsured could be as high as 70%.

"There is a definite trend of underinsurance in the agriculture industry," says Smit. "Based on our claims experience, we estimate that between 60% and 70% of farmers are underinsuring their key assets. The result is that many farmers could face financial ruin if they are unable to afford to replace these assets."...

A pumpkin harvest in South Africa, shot by NJR ZA, Wikimedia Commons, under the Creative Commons Attribution-Share Alike 3.0 Unported license