Using Captive Insurance to Manage Risk in a Changing Agricultural Sector

Agricultural businesses face complex, evolving risks like severe weather, crop disease, supply chain disruption, and contamination that standard policies may not fully cover. Captive insurance allows farmers and agribusinesses to tailor coverage—such as for crop failures, livestock mortality, environmental liability, and business interruption—based on their specific exposures.

By retaining premiums within a captive, agricultural firms can stabilize insurance costs, accumulate reserves, and reinvest in risk reduction and financial reserves. Captives also facilitate innovative solutions like parametric triggers for weather events and coverage for emerging areas like organic, hemp, or biotech farming. Overall, captive structures enable agri-players to gain control, cost efficiency, and resilience in an unpredictable and capital-intensive sector.

Source: Pinnacle Actuarial Resources

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