Insurance Agents Bring the Benefits of InsurTech to Farmers

Originally published in Westfield Insurance 05/13/2020

The independent agent channel is well positioned to deliver risk control services for farms and commercial agriculture.

By Dave Ruppel

Vehicle telematics tools help farmers improve vehicle and driver safety, typically using in-cab monitoring systems. (Shutterstock)

How will a world with 9 billion people be fed?

Soil, sunshine, water, fertilizer, labor and farm equipment are the primary inputs of farm production. But growing crops and animals for a safe, bountiful food supply increasingly takes technology, and that includes InsurTech.

How InsurTech helps farmers

Farms, ranches, food manufacturers and commercial agricultural facilities in the United States are turning to InsurTech tools, facilitated by insurance carriers and fostered by independent agents.

The independent agent (IA) channel is especially well positioned to deliver risk control services for farms and commercial agriculture. That’s been a value proposition in the IA channel for decades. Super-regional carriers and independent agents can and should work with farm and agricultural business owners to help them lower risk and losses, just as they do with other markets.

The farm and agricultural market is a potential area of growth for numerous insurance agencies. It’s a broad, large, sophisticated business with easily identifiable risks that can benefit from the value-added services delivered by independent agents and their carriers.

My organization, Westfield, is currently reviewing three opportunity areas for the application of tech tools in the agricultural section:

1. Over-the-road farm and agricultural transportation vehicles.
2. Vehicles and other equipment that operate on the farm.
3. Mobile devices, including phones, used by managers and employees.

With the blossoming of InsurTech, we view it as a responsibility to stay up-to-date on what might be relevant to agriculture business customers in order to recommend tools and practices that offer appropriate opportunity for farm/ag customers to reduce risk.

Optimize farm technology

Precision digital solutions are a means for farm operations to capture data on crop performance and livestock behavior, equipment functionality, weather patterns (using satellite monitoring and local weather stations), and soil conditions.

All that data is integrated into one platform for visibility in real time. That helps farmers make better, more timely business decisions.

The revolution in farming now includes widespread use of drones, which weren’t being used 10 years ago. That use raises questions about covering property and liability risks to farmers.

An estimated 65% of farms have such technology or know of its availability, but don’t use it to its fullest potential due to constraints such as limited broadband availability in rural areas and drone costs compared to perceived value. But farmers are starting to recognize they could be left behind if they don’t take advantage of the plethora of technology.

Increasing farm safety with telematics

Vehicle telematics is a promising InsurTech service for farm/ag accounts.

Vehicle telematics tools help farmers improve vehicle and driver safety, typically using in-cab monitoring systems. They assist a business owner in handling fleet operations, managing data on driver behavior, and capturing footage of accidents. The business owner can use all of that to coach drivers to improve safety and performance while reducing risk.

Choosing the best telematics options

Telematics is a competitive field. How can any agency leader set aside the time and attention to find a source from among dozens? To help agencies and their farm customers, Westfield evaluated and narrowed down the numerous telematics choices to those we believe best fit the farm/ag sector.

Westfield has made two InsurTech tools available for customers. These two InsurTech tools, the Lytx DriveCam safety program and Mentor by eDriving driver education program, can be purchased by customers for installation on vehicles operating both on and off the farm.

Ltyx. This cloud-connected vehicle dash camera system links to a video platform for the farm operator. It makes video clips from within a vehicle available to the farmer. The device includes both front- and rear-facing cameras to give a 360-degree view inside and outside of the vehicle, and it has night vision.

Farm/ag operators tell us that the ability to see what happened after an accident, road rage incident, law enforcement stop or other situation is helpful. It can save time and money, protect drivers, and increase efficiency.

Among the advanced capabilities of the system is the ability to capture and categorize risky driving behaviors. Farm managers then can use this to coach drivers and provide targeted training.

eDriving Mentor. This system also is a vehicle telematics platform, but with a different approach. Operating as a driver risk management program, it monitors driving behaviors using smartphone-based telematics. It calculates a safe driving score intended to be predictive of a driver’s likelihood of being in a collision. Most important, it intervenes to remediate risky behavior by prescribing interactive micro training directly to drivers in the app.

Creating agent value

As savvy as farm and agricultural customers can be as businesspeople, many don’t have the scale to hire fleet or equipment managers. So, the value-added services that independent agents and their carriers can identify — including InsurTech tool s— are of great help.

Farm customers have been turning to these InsurTech tools in recent years. Their feedback? It’s been favorable. Many especially appreciate the research and insights in selecting tools. These customers now have a way to gather data together in one place to quickly make decisions about fleet and equipment management. Without the help of their independent agencies and insurance carriers, they wouldn’t know about or be able to use these resources.

Like other parts of the economy, today’s farm and commercial agriculture sector is facing a driver shortage. That’s led to numerous people driving heavy commercial vehicles who don’t have sufficient experience and skills. InsurTech tools are a way to mitigate a wide range of risks, including those posed by both new drivers as well as long-standing, experienced drivers.

David Ruppel is division leader, agribusiness, at Westfield, a superregional insurer that offers commercial lines coverages in 21 states and personal lines coverages in 10 states through independent agents. Westfield was founded in 1848 by a small group of farmers seeking a better means to insure their land. For more information, send email to corporatecommunications@westfieldgroup.com.