Sandbox Mutual’s recent unveiling of new farm insurance product lines has been greatly influenced by the changes in the industry throughout the past couple of decades.
“When we were doing our research, we realized how technologically advanced farming as become,” said Chelsea Materi (pictured), AVP of underwriting at the company.
“While family-run or specialty farms still exist, the job has become a big commercial enterprise, and we wanted to make sure we have products to meet the needs of a more diverse group of farmers.”
In a conversation with Insurance Business, Materi and her colleague David Chapman-Collier, manager of product development spoke about the need to streamline coverage options based on farming objectives, why the company increased its capacity in the sector and how to navigate challenges in loss prevention.
In 2022, SMI rebranded as an organization, taking on the new name Sandbox Mutual Insurance. As a business that was founded by farmers, it was time to innovate and streamline the product offerings for this sector, attesting to the company’s new vision of creating a simple and reliable insurance experience.
“We wanted to emphasize an ease of coverage,” Materi said. “A simplified process is better for both brokers and policyholders alike.”
This resulted in the idea of packaging lines of coverage to fill in the gaps in other situations while also eliminating some of the red tape that brokers and clients go through when there are changes in business structure or form.
One of the most challenging and widespread gaps is the difference between more commercial and niche farming operations.
“Sometimes policyholders were getting homeowners rates rather than bond rates because of the acreage of their property. So, we decided we need to bridge that gap. And that's what we did with our lifestyle box,” Chapman-Collier said.
“When things are handled in a blanket bundled format, it just allows those things to happen without administrative policy changes all the time.”
Materi also revealed how the brokers who traditionally sell farming insurance were instrumentally valuable to the creation of these bundled packages.
Upon further conversations with brokers, Materi and Collier-Chapman were also informed of the rapidly growing independent, specialty and nice farming operations that are growing in popularity.
“People were struggling to place insurance for these smaller businesses,” Collier-Chapman said.
“As a result, we built a box directly for that for those gaps. And within that box, we have property protection of production protection or equipment protection. And under our production protection, we have a lifestyle livestock endorsement valued at $25,000.”
The company also put forward what they are calling the “Buzz Box”, which is designer for leaf cutter and honeybee farming operations.
Additionally, 10% of premiums from this box will be donated to the Pollinator Partnership Canada.
During conversations with brokers selling farming insurance, Sandbox Mutual was informed of the reduced capacity for that line of coverage.
“As these operations get bigger, and the cost with inflation of machinery, or just everything that they do, the need for higher limits is there,” she said.
In order to make the company more competitive in this field, Sandbox Mutual decided to increase the limits it was able to write for its farm line of business.
“And so before this year, we would write a maximum of $5 million in any way on risk group,” Materi said.
“We actually increased our capacity in the double digits to $10 million, which was key to being effective in the farm space.”
However, there are still other persistent challenges affecting the industry that need to be dealt with, including the looming threat of cyber attacks.
As a result, the company is looking to add cyber liability and protection to its packaged offering in the near future.
One of the guiding pillars of any work in insurance is having robust loss prevention knowledge and measures to impart on policyholders looking to safeguard their assets.
As Sandbox Mutual continues to grow in the farming sector, this vigilant mindset is becoming increasingly more important.
“We’re very invested in loss prevention” Materi said.
This has resulted in an optimized loss prevention service, where the company’s employees can meet with policyholders in order to prevent any unnecessary interruptions to their farming operations.
“And being a partner to them, it's not about coming on site and pointing out problems,” Materi said. “We want to approach it in a collaborative way where the broker attendance with us and really build that trust with a client that even though they have protections in place, we can also help avoid the loss in the first place.”
