Agents Learn about Opportunities, Challenges at Agribusiness Conference

The Insurance Brokers and Agents of the West (IBA West) and Insurance Skills Center sponsored the 17th Annual Agribusiness Conference held March 17 and 18 in Sacramento. The nation’s largest agricultural conference drew approximately 450 participants from 23 states and Canada.

Over 25 classes were offered at the conference, giving agents the opportunity to earn continuing education credits and the nation’s first insurance designation on agricultural risks, the Agribusiness and Farm Insurance Specialist designation.

The opening session’s keynote speaker was A.G. Kawamura, secretary of the California Department of Food and Agriculture. Kawamura, who was appointed by Governor Schwarzenegger in November 2003, emphasized that there is tremendous opportunity for growth in the huge California agricultural industry, but the business is facing some challenges.

“We’re not having the best of times, or the worst of times,” Kawamura said. “Farming in all parts of the country is going through the same challenges.”

Calling farmers “high risk gamblers,” he pointed out that they are constantly vulnerable to weather and other things out of their control. He also recognized problems in California, where workers’ comp premiums are so high that farmers are pulling their businesses out and relocating to states such as Texas, Utah and Idaho.

“We’ve made it impossible for business to stay here,” he said.

He reiterated the importance of solving the current problems in the California agricultural industry so that the world’s sixth largest economy can become the world’s third or fourth largest economy. He applauded the insurance industry for assessing agricultural risks and influencing important legislative decisions that benefit farmers, but said that farmers and the insurance industry must continue to work together in the future.

“Our food supply is not a fixed thing; it could be gone tomorrow,” Kawamura concluded.

Dr. Emmett J. Vaughan, professor of insurance at the University of Iowa, went over the 2003 changes to farm property and liability insurance during the opening session. He discussed the changes in the various forms that insurance agents use to write farm property and farm liability.

Cheryl Koch of the Agency Management Resource Group taught classes on farm property, farm liability, farm property exposures and endorsements and farm liability exposures and endorsements. She emphasized that a farming operation is a business with an incidental residential exposure.

Breakout classes offered included Genetically Modified Crops, Wineries and Vineyards, Workers’ Comp and the Migrant Workers Act, Working With Wholesalers in the Ag Market and Bio-terrorism Risks in Agriculture.

In the breakout class on genetically modified crops, Marjorie Segale, curriculum director of Insurance Skills Center, explained that biotechnology helps the environment and improves the quantity and quality of available food.

Laurie Infantino, president of Insurance Skills Center, discussed all of the coverages associated with writing insurance for wineries and vineyards, including property, liability and inland marine, in a class on wineries and vineyards. Leaders in the market that provide winery and vineyard insurance include Chubb, CNA, Fireman’s Fund, Oregon Mutual, Allied and Golden Eagle. She said that insurance prices in the wine industry are up due to an increase in claims in the last year, with most claims resulting from significant fires, contamination and leakage. She said that the industry is becoming more sophisticated and will benefit from the lightening of the current hard market.

M. Thomas Ruke Jr. of Insurance Business Consultants Inc. presented “Workers’ Compensation and the Migrant Workers Act.” Ruke said that insurance agents need to be careful when writing workers’ comp for employers who have workers in more than one state. He said that injured migrant workers may claim benefits in four different geographic locations: place of hire, place of employment, place of injury and place of residence. Because agriculture is extremely hazardous, agents must be particularly careful with workers’ comp and cover all of the various geographic areas.

Ron Abram, president of Abram Interstate, discussed the differences between wholesalers, managing general agencies and Lloyd’s brokers in a breakout session. He explained that MGAs usually have binding authority, while agents, as retailers conducting business in the wholesale market, have very limited authority. He said that authority granted to agents by wholesalers may be very different from the authority agents receive from direct writers. But he said the relationship between wholesalers and agents can be beneficial to all the parties involved.

“The goal is to generate good, profitable premium for carrier and a good, solvent carrier for your insured,” Abram said.

Jerry R. Gillespie, director of the Western Institute for Food Safety and Security, presented a seminar on bio-terrorism. He said that preparedness on an individual, local, state, national and international level is necessary to survive an agricultural terrorist attack. Agents must assess all of the risks and be thorough in their coverages, he said.

“We aren’t prepared to address agro-terrorism. We may be a little better off than July of 2003, but not much more.”

Topics California Agencies Workers' Compensation Agribusiness Property Market Training Development