More sugarcane farmers in Queensland are making use of a unique parametric insurance launched by WTW that covers yield shortfalls caused by reduced application of nitrogen fertiliser, underwriter Liberty Specialty Markets says. 

The fertiliser has doubled in cost in Australia in the past year and the innovation can save urea input costs while protecting against any profit loss from lower nitrogen use. 

“This will be our second season working with WTW on this innovative sugarcane product and it is terrific seeing more growers getting on board with this new approach,” Liberty Specialty Markets Asia Pacific weather team chief Michael Lincoln said. 

Liberty has been pioneering parametric weather insurance solutions for four years in Australia, helping protect businesses from weather-related perils, including winemakers from smoke taint, forestry plantations from bushfire and construction companies from wind and rain. 

WTW says optimising nitrogen application is an important business consideration for farmers and the Nitrogen Risk Insurance product gives sugarcane growers flexibility and control with a parametric solution that safeguards their profitability. 

“WTW is proud to have developed a new type of parametric insurance which pays out faster for sugarcane farmers,” Account Director Russell Mehmet says. 

“The claims process is automated. Insurance assessment is not required and farmers won’t have to lodge a claim. This is a new way of administering insurance which increases efficiency for everyone.”  

Payouts are based on simulated yield outcomes using Bureau of Meteorology measurements including rainfall, temperature and solar radiation. Each policy is tailored to location, soil type and crop start time, and farmers can insure one, some or all ratoon blocks. 

WTW says the savings on fertiliser costs could exceed the cost of protecting against reduced yield arising from reduced nitrogen rates. Historical modelling of crop yield for a selected combination is used to calculate the insurance premium.