Agribusiness

Why WTW

WTW has deep expertise in the agriculture sector and is recognised as a leading global risk advisor and broker of weather risk management solutions.

Our agriculture and weather expertise sits within a global team and includes colleagues in London, New York, Paris, Hong Kong, Sydney, Brisbane and Auckland. The team has been instrumental in structuring and placing many innovative and award-winning programs and has been awarded best European broker for weather risk management for the past three years. Solutions that we have placed on behalf of clients address the adverse impacts of temperature (freeze/heat), rainfall (drought/excessive rain), tropical cyclone, hail and bushfire.

Our global practice group assists in:

• Protecting physical crops
• Facilitating access to, or reducing the cost of, credit and finance
• Protecting revenue shortfall resulting from reduced agricultural production
• Providing weather-related product enhancement opportunities, to increase sales
• Providing a fixed cost of commodities in the event of a loss
• Advising and assisting our clients with product development.

We achieve this by combining expertise across our insurance and reinsurance teams in the agriculture and weather-index markets, to design bespoke solutions for you.

Our global team places business in all the key insurance, reinsurance and capital markets giving us excellent market leverage and insights into the very latest offerings.

Structuring a solution

The Willis Towers Watson parametric team partners with you to evaluate your specific weather-related risks and the impact that weather uncertainty has on your business.

We seek to understand your goals, risk appetite and budget, analysing appropriate weather data and developing bespoke indices that best reflect your exposures. Our goal is to develop a solution that best reflects your needs and then negotiate the best terms available from insurers in Australia and globally.

Willis Towers Watson provides an end-to-end service, encompassing risk consulting, data analysis and program structuring to policy negotiation and placement. Where the policy is triggered, we also manage the claims process.

Complementing our experience in structuring and executing weather risk management programs, we have deep expertise in modelling natural perils such as tropical cyclone, earthquake and flood.

Willis Towers Watson has developed locally based and detailed proprietary risk models for Australian perils, such as flood, bushfire, hail and cyclone, which we deploy alongside the key commercial models that we licence.

We also have strong links with academia through the Willis Research Network (WRN) which gives us access to the latest climate research. WRN comprises over 50 academic partners from all continents including the top UK universities of Oxford, Cambridge and University College, London. In Australia, we work with the University of Southern Queensland. Building on the strengths of these partnerships, this award-winning collaboration works to deliver and incorporate solutions that increase resilience and improve the market’s coverage of risk.

Parametric solutions

Most farmers remain uninsured against the financial impact of adverse weather. Multiperil crop insurance, though available in Australia, is rarely purchased by growers. The alternative is a parametric solution, providing a more cost-effective mechanism for managing the financial impact of weather uncertainty.

How does a parametric solution work? It responds to movements in a weather-denominated index, for example temperature, precipitation or wind-speed. A claim is triggered if the value of the index during the contract period moves above (or below) an agreed index point. The claim amount is calculated according to a pre-agreed scale of payment, rather than by reference to actual loss or damage.

The coverage is transparent and flexible and there is no protracted, expensive or intrusive loss adjustment process. Claims are typically settled within 14 days of the final index value being reported.

Nitrogen Risk Insurance

Our Nitrogen Risk Insurance program is a parametric solution developed specifically for Queensland’s sugarcane farmers to provide peace of mind by covering the risk of yield shortfall from reducing Nitrogen rates. Optimising nitrogen application at times of high fertiliser costs is an important business consideration for farmers. Visit the Nitrogen Risk Insurance webpage to learn more about the program.

Agri analytics

Understanding the crop risk on the ground is paired with intelligent analysis and creative reinsurance structuring to provide a holistic service to your business.

We bring a unique combination of actuarial sciences and specific knowledge of agriculture risks and perils to our work. You will benefit from a full suite of analytical expertise to support optimised insurance programs and/or reinsurance structures, including:

• Tailor-made agriculture portfolio modelling with a focus on your largest potential loss
• Client data analysis
• Vendor models/Willis Towers Watson Agriculture models
• Market historical performance data
• Weather data analysis
• Reinsurance structure calibration in accordance with your key performance indicators
• Knowing your agriculture portfolio and assessing its Probable Maximum Loss is essential to structuring your suitable reinsurance protection.

Our knowledge of agriculture risks, supported by state-of-the-art analytical and modelling capabilities, helps secure competitive reinsurance terms with sustainable capacity. Our team has a deep appreciation of capacity providers and has strong relationships with key markets.

In the media

Our parametric solutions have been featured in The Weekly Times, The Courier Mail, ABC radio’s Country Today with Libby Price, The Chronicle and Queensland Country Life.

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