Modern agriculture has evolved far beyond the farm gate. Today’s agribusinesses operate across complex, technology-driven value chains, introducing new and often unexpected risks. The message is clear: insurance models must evolve to keep up.
From drones to AI-driven logistics, today’s farmers face a new generation of interconnected risks. Here are five that are reshaping how agricultural insurance needs to work Source:
PexelsThe 58th NAMPO Harvest Day agricultural exhibition held at Bothaville, Free State, from May 12 to 15, with the theme Resilience through Innovation.
Speaking ahead of the invent, Hollard Insure says insurers, brokers and agribusinesses need to rethink how agricultural risk is assessed in an era shaped by automation, artificial intelligence and increasingly diversified business models.
“Modern commercial farming has expanded beyond production, while becoming increasingly precise, data-driven, and technologically advanced,” says Andries Wiese, head of Agriculture at Hollard.
“Innovation across the value chain has undoubtedly improved efficiency and productivity, but it has also introduced entirely new, and often multi-layered, categories of risk.”
Below are five ways insurance models must evolve to fit this new agricultural world:
1. Connect risk across the entire agribusiness value chain
Modern commercial farming no longer ends at production. Agribusinesses now extend into processing, logistics, storage, wholesale and retail.
Wiese explains that this expansion means risk can no longer be assessed in isolation.
“As an agricultural insurer, it’s our responsibility to share information, assist and advise our brokers and clients regarding changing risks as the sector evolves,” says Wiese.
He adds that insurers must understand new business models, machinery, technologies and distribution systems to ensure risks are properly mitigated and covered across the full chain.
2. Move from bundled policies to tailored risk solutions
Traditional agricultural insurance has often been structured as broad, bundled products.
However, Wiese notes that increasingly individualised agribusiness models – supported by advanced technology – are making these outdated.
“In effect, while we need to deconstruct our policies and re-assemble them on a tailored basis, we also have to acknowledge that insurance is just one part of a broader risk management strategy,” he says.
This requires solutions that reflect each agribusiness’s unique risk appetite and operational complexity.
3. Recognise how technology creates new and unexpected risks
Innovation has transformed efficiency, but it has also introduced new risks that traditional policies were not designed to cover.
Examples include:
- AI systems managing logistics or production
- Drone usage introducing aviation-related exposure
- Precision farming systems dependent on data accuracy
Even small failures can have major consequences. A breakdown in navigation systems, for example, could result in lost export goods and significant financial loss.
“The introduction of new technology can render existing cover redundant or create entirely new risks,” Wiese explains.
4. Adapt cover for highly specific operational realities
Modern agricultural equipment and processes often require highly contextual insurance thinking.
Wiese highlights practical examples:
- In dairy farming, advanced artificial insemination tools such as specialised flasks may not be adequately covered under legacy policies.
- In pivot irrigation systems, rubber tyres are critical components, yet standard motor policies often exclude tyre damage.
- A failure in such components can halt entire operations.
“These examples show why a one-size-fits-all approach is no longer effective,” he says.
5. Build holistic, multi-layered risk management beyond insurance
Wiese stresses that insurance alone is no longer sufficient.
“As insurers, we must ensure agribusinesses can withstand technical, financial and other setbacks, and remain productive and sustainable,” he says.
This includes combining traditional insurance with alternative instruments and broader risk tools – financial, operational and sometimes even medical in nature – depending on the business model.
He adds that the goal is not just cover, but resilience: ensuring agribusinesses can continue operating despite disruption across an increasingly complex ecosystem.
