Explore Land Bank Insurance’s transformation into a formidable asset insurer within South Africa’s agriculture sector. With Land Bank Insurance Company’s customised coverage, farmers of all sizes gain much-needed protection against uncertainties, fostering resilience and sustainability in their farming endeavours.
While Land Bank is commonly recognised as a development bank, it boasts a lengthy history as an asset insurer for the agricultural sector. Land Bank Insurance Company (LBIC) provides short-term insurance coverage for all agricultural activities in South Africa, offering products specifically tailored to meet the sector’s insurance needs.
LBIC managing director Pascal Siphugu tells Food For Mzansi that this comprehensive coverage for both personal and farm assets under a single policy highlights the importance of tailored agriculture insurance for small, medium, and large-scale farmers.
Insurance provides financial stability and protection for farmers’ investments in crop production and agricultural assets against perils over which they have no control.
Explaining the legal framework, Siphugu says, “The Land Bank Insurance Company Limited (LBIC) and Land Bank Life Insurance Company Limited (LBLIC), collectively referred to as Land Bank Insurance (LBI), are subsidiaries of Land and Agricultural Bank of South Africa (Land Bank).”
He further adds that Land Bank is a state-owned entity reporting to the National Treasury as its shareholder, and the core mandate of its insurance subsidiaries is to provide appropriate risk mitigation solutions to the agriculture sector within the borders of South Africa.
What insurance cover does LBI offer?
LBI provides life insurance and non-life insurance solutions with tailor-made offerings suitable for farmers. LBIC and LBLIC have built a good reputation in the sector offering crop insurance, agri-asset insurance, and credit life insurance.
“Insurance is a key instrument for asset protection and wealth preservation. The main aim of asset insurance is to restore the insured to a position they would have been before suffering a loss. The loss could be fire, theft, accidental damage, and so forth; thus, insurance plays a critical role in preserving the gains of the farmer’s hard work and provides certainty for the future availability of assets to help the farmer go about their daily work,” says Siphugu.
Therefore, such insurance should form part and parcel of every farm’s operation to drive long-term sustainability and, as insurers, we need to drive awareness campaigns and education about insurance programs available to protect farm assets, he adds.
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What type of assets are covered under the asset insurance policy?
The agriculture sector in South Africa is highly vulnerable to external factors such as weather unpredictability, pests, and market fluctuations, all of which can offer substantial hazards to farm productivity and sustainability.
“Asset insurance covers items that have to do with farming operations i.e. vehicles, fencing, irrigation systems, machinery, livestock, computers. The assets will be insured against fire, flooding, theft, and natural disasters amongst other risks. The cover ensures that agricultural assets are protected to give farmers peace of mind to focus on agricultural activities,” he explains.
The insurance policy covers a range of assets crucial to farming operations, including cars, electronic equipment, personal liability, homes, household items, irrigation systems, office contents and buildings, machinery breakdown, fire damage, business interruption, theft, loss, and damage.
“In case you are wondering about livestock insurance, it is indeed covered that is also offered, albeit as an accommodative section to an underlying policy and not on a stand-alone policy. We plan to introduce a stand-alone livestock product shortly. Unfortunately, we do not provide cover for poultry at this stage,” Siphugu said.
Land Bank continues to support farmers in Mzansi
Today, Land Bank continues to support farmers and agribusinesses throughout the agricultural value chain. Bringing in new entrants from historically disadvantaged backgrounds is important to the bank’s mission.
Land Bank continues to provide a commercial lifeline to these new farmers facing the obstacles of establishing viable agri-businesses through adequately tailored finance solutions that promote personal and economic viability in a sector critical to the economy.
“We at Land Bank understand that farmers face a particular set of economic challenges. That is why, to fulfil the needs of a significantly more diverse marketplace, we provide a more innovative approach to finance. Bespoke insurance solutions are being developed, and through partnerships, world-class customer experience at the time of need has become a pillar of the organisation,” says Siphugu.
Land Bank continues to offer a commercial lifeline through appropriately designed financial products that facilitate personal and commercial viability in a sector that is vital to the sustainability of South Africa and its people.
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