Rural Insurance has launched a suite of green insurance products to meet growing demand in the farming sector.
Simon Stevens, Rural Insurance managing director, said Rural is the first insurance company to offer these products to the farming sector, and was driven by rising demand: “Our brokers have been telling us that more and more of their farming customers are investing in green energy, such as wind turbines and hydro-schemes. Our customers will be able to purchase cover either as a standalone product, or as a bolt on to our farm combined product.”
Mr Stevens said that, for the first time, farmers would be protected from both material damage and loss of revenue. “Many farmers sell excess electricity from, say, their wind turbines into the national grid, generating a revenue stream as well as power for themselves. We will cover not only material damage to plant and equipment, but also loss of revenue from onward sales. No other agricultural insurer provides this level of cover,” he added.
Mr Stevens said the business was not expecting significant immediate GWP. “We are targeting around £500,000 for the first couple of years, based on an average annual minimum premium of roughly £500 per policy. However, these are conservative estimates, and we may well extend our cover to the wider rural community in due course.”
Mr Stevens said that use of renewables is set to grow as the UK looks to meet it’s 15% renewable energy target by 2020 (currently 3%), but Government plans to cut support for solar power by half would be a significant setback for domestic renewable energy.
“If the Government is serious about meeting its targets, it has to assist farmers - who are leading the way in investing in green energy - and maintain subsidies to encourage further investment.”
He added that, given investment in renewables can be expensive (a typical small hydroelectric scheme costs £25,000, according to the Energy Saving Trust), it also made sense for farmers to insure against material damage and revenue loss.
Commenting on the growth of windpower, Mr Stevens said this year the installed total capacity of wind power alone in the United Kingdom was over 5.7 gigawatts and wind power capacity is expected to continue growing in the UK for the foreseeable future.
RenewableUK estimates that more than 2 GW of capacity will be deployed per year for the next five years. Among small users, RenewableUK expects market growth of 167% this year for small wind systems (SWS), and estimates that, by 2020, SWS capacity could reach 1.3 gigawatts.
Mr Stevens said the introduction of Green Products marked the latest stage in Rural’s strategy to become a top five player in the agricultural market, with a strong focus on high quality service and specialisation. “The agricultural market continues to evolve rapidly, and specialist insurers like Rural - with our flexible business model and ability to create new products and services rapidly to fulfil new demands - are able to take advantage.”