Farm Connection
AmericanAgTM Emerging Issues for the Farm
Welcome to the AmericanAgTM Farm Connection Emerging Issues page! This section provides details about agricultural emerging issues.
Internet of Things (IoT)
Brief Summary
Farmers today face an increasing worldwide demand for food; a changing climate; and a limited supply of water, fossil fuels and arable land. To surmount these hurdles, the agriculture industry is adopting an array of digital solutions including:
- Robotics
- GPS Technology
- Computer Imaging
Sensors in these IoT devices monitor and respond to weather conditions, soil moisture and acidity, movement and behavior of livestock, agricultural facilities, and more.
These devices collect and transmit data that can be used for underwriting and risk management. However, reliance on these devices to monitor and perform operations and the collection and transmission of data can also create new risks.
Emerging Issue
Rise of Internet of Things used in agricultural production may change risks and insurer expectations from farmers and ranchers.
Risks
- Failure to meet expectations from farmers and ranchers who expect premium discounts and value added services related to IoT devices
- Data breach and cyber exposures
- Increased cost of repairs for farm equipment
Opportunities
- Modify farm coverage to respond to unique IoT exposures
- Leverage IoT data to implement risk management strategies for farm
Unmanned Aerial Systems (UAS)
Brief Summary
Agricultural operators embrace technology that increases productivity and improves efficiency. UAS will have a major impact throughout the agricultural cycle. They are currently used for soil and field analysis, crop monitoring, and livestock health assessment. As this technology evolves, the capabilities of UAS are growing rapidly. Insurers must stay informed about how this technology will be used on the farm.
Currently, there are three rules that apply to UAS operations:
- Hobbyists – Special Rule for Model Aircraft (Non-Commercial)
- Operators that are granted 333 exemptions (Commercial)
- Those who operate under FAA Rule 107 (Commercial)
Emerging Issue
As the technology becomes increasingly affordable, investment in UAS is an important choice and there are many liability exposure issues that must be contemplated. Training and compliance are critical to risk management.
Risks
- Changing regulatory landscape
- Potential broad use of UAS create new risks
- Public perception of UAS – personal injury
Opportunities
- Develop UAS insurance solutions for core customers
- Integrate risk management into product and underwriting
Legalization and Decriminalization of Cannabis
Brief Summary
As more states “legalize” and decriminalize cannabis, traditional farmers are looking to take part in growing this new commodity crop.
As cannabis becomes an attractive cash crop, there’s a focus on finding the most efficient ways to grow it and develop marketing systems. These solutions may come with innovations in lighting or hydroponic water delivery systems.
Emerging Issue
While cannabis may be legal or decriminalized in a state, federal law still prohibits it. Most banks and credit card companies won’t do business with cannabis businesses due to concerns they’ll be penalized for money laundering. Insurers are not in a rush to offer coverage for this type of business because it is still federally illegal.
Risks
- Federally illegal activity
- Inadequate policy language
- Employees working while under the influence
- Vandalism – public response
- New farming techniques create new exposures
Opportunities
- Stay prepared for federal legalization – explore insurance solutions now and be ready to respond
- Consider unique needs of farm insureds and develop new coverages
- Integrate risk management into product and underwriting