Insurer King Price has launched an industry-first ‘pay as you farm’ agricultural insurance product that offers farmers comprehensive cover for their agricultural vehicles all year round, linked to an annual rebate based on the time that the vehicles are actually used.
Kobus Stapelberg, King Price’s agriculture partner, says that ‘pay as you farm’, which is offered in partnership with FarmSpace and Africa Farmers Network, is designed to help farmers save on their insurance, lower their capital risk and maximise their profits.
‘Pay as you farm’ sees tracking devices being attached to agricultural vehicles, which are connected to software that allows farmers to track their vehicles at all times. The software also provides farmers with the data they need in order to make real-time decisions based on their vehicles’ usage, without having to rely on spreadsheets and gut feel. Further, it feeds the usage information to King Price, to help determine a once-off rebate on the annual renewal of ‘pay as you farm’ policies.
Stapelberg says that ‘pay as you farm’ is an AgriTech system created specifically for South African farmers to improve their overall farming experience: “By tracking when agricultural vehicles are being used, we estimate that farmers can save up to 30% on their insurance in the form of an annual rebate.”
“What happens currently is that farmers put their vehicles on limited cover during the off-season, and then change it to comprehensive cover during the relevant season. If they forget to change the cover, they’re at increased risk of losses. What we’re doing is providing comprehensive cover throughout the year, but offering a once-off annual rebate according to actual usage.”
This new product highlights King Price’s rapid rise in the agri space. Since entering the sector two years ago under industry veteran Stapelberg, the insurer has made a name for itself for its use of technology and data analytics to offer innovative products.
Tech and data enable the insurer to be agile with regards to making the changes that farmers need, and also enables their ability to add innovative products – like incorporating drone technology for farm security and animal management – in the future. King Price is also one of just a few insurers in the country to offer theft cover for livestock, dependent on the farmer’s ability to maintain rigorous herd management practices.
“We did months of research into the market and saw that the available agri insurance products don’t really meet the needs of modern farmers,” says Stapelberg. “Farmers want an insurance premium that reflects the fact that their vehicles aren’t used all the time. Telematics is already widely used in the transport industry, and farming offers an obvious-use case to be innovative.”