Insurance News magazine June/July 2026

Ploughing a lone furrow

Rural Affinity says its new multiperil crop cover is unique in the farmers’ market

By Claire Heaney

When specialist agricultural insurance agency Rural Affinity launched with a staff of four, the business plan projected modest premium – no more than $20 million.

Twenty years on, it is closing on $180 million annually, and founder and managing director James Hooper predicts it will reach $200 million in the next five years.

Mr Hooper and company director and secretary Mike Kilborn were working for other insurers and were at times friendly competitors when the idea for Rural Affinity took shape.

“The motivation was really to get in control of our own destiny rather than working flat out for other people, and to become our own bosses,” Mr Hooper says.

In 2006, they saw an opportunity to use his experience in crop insurance and Mr Kilborn’s farm cover expertise.

Mr Hooper tells Insurance News they wanted to deliver a new level of professionalism in the rural insurance market – one taken for granted in the rest of the industry.

“We started doing crop insurance because we saw a clearer opportunity in the market,” says Mr Hooper, who spent his formative years in a farming community and studied agriculture and commerce.

“[In] most advanced and developing countries, the government participates in paying a portion of the insurance premium. Typically, that can be between 50% and 70% of the premium.”

The Australian government does not support such a plan. Because insurance would be too expensive, there is no broadly available multiperil crop cover in Australia. Crops can only be insured for fire and hailstorms.

Rural Affinity has launched a pilot multiperil crop insurance that it says is fundamentally different to traditional cover, as it operates over a three-year period.

But Mr Hooper says while crop insurance premium is estimated to be worth $200 million, farm insurance could be as high as $2 billion.

In September last year, the Australian Bureau of Agricultural and Resource Economics and Sciences – the research arm of the Department of Agriculture – forecast farm, fisheries and forestry production will hit a record combined value of $101.6 billion in 2025-26. Agriculture exports are worth about $74.6 billion.

In 2011, Rural Affinity – backed by Munich Re subsidiary Great Lakes Australia – added farm insurance to the portfolio.

Mr Hooper says agriculture technology is looming as a game-changer for insurance.

“What agtech gives us is the ability to close the asymmetry of information available to the insurer and the farmer. We can access data from that farmer readily now,” he says.

“Farmers are using all sorts of agtech. They are monitoring when they are harvesting a crop and recording yields live. If the farmer gives us permission, we can access that information virtually in real time.

“What that means is we know a lot more about what is happening on the farm, and that enables new insurance products such as our multiperil crop insurance.”

He says technology gives insurers better information quickly in a usable format, increasing efficiency and reducing costs.

“Australia is a big country. Very sparsely populated and we are a long way from our customers. Dealing with that geographical diversity is great for a portfolio but it is difficult in terms of serving the customer, which is why we depend on our broker network so heavily.

“We are lucky in Australia that we have a great network of brokers regionally and they do a great job of looking after the customer.”

Mr Hooper says despite climate and other risks, he sees no shortage of insurers wanting a share of the market, and premiums have stabilised.

“I feel like the rural market has suffered some significant losses, which is tempering any dramatic premium reduction despite the softening market. There is a downward pressure on premiums but it’s modest at this point.”

Mr Hooper identifies the spread of renewable energy infrastructure as an emerging risk for farmers and a challenge for the insurance industry.

He says a typical farmer might have $20 million public liability coverage.

In the past, if a fire spread from their property, the farmer was more than likely surrounded by other farms and damage to crops, fences, farm sheds and livestock was often within the policy limit.

But with large-scale commercial wind turbines and solar panels scattered around their land, farmers may find their cover insufficient.

“If they happen to be in the vicinity of a solar farm or a wind farm, the size of that exposure is significantly increased.

“The $20 million may not be enough if there is a major loss impacting one of those pieces of infrastructure. That is an emerging risk. Both the agriculture sector and the insurance sector need to come up with some solutions to that.”

Mr Hooper says there have cases of farmers facing claims involving renewable power infrastructure, but to date they have been covered.

Underinsurance is another “big challenge”, he adds, noting: “Farmers tend to use things until they are no longer usable.”

He says a farmer might have a 40-year-old shed that would cost significantly more than its perceived value to rebuild after an insurable incident.

Some people underinsure because they have never had a major claim and do not think it will happen to them.

He says underinsurance was apparent after several recent events including 2021’s Cyclone Seroja, which ripped through the mid-west region of Western Australia – not somewhere normally associated with a cyclonic crossing of that impact.

There was a high level of underinsurance in the area, which included many agricultural assets. The Insurance Council of Australia declared the storm a catastrophe and in February 2022 valued nearly 10,000 claims at $346.7million.

Looking ahead, Mr Hooper says technology will be key to Rural Affinity’s success.

That includes better sharing of information with insureds, who he acknowledges may initially be wary of doing so.

But, he says, many innovative farmers are using four or five technology platforms and tapping into that information will help shape new products, tailored to their needs.

Rural Affinity, which has paid out more than $500 million in claims with 7000 farmers, is also looking to improve its own technology interfaces with brokers.

“If we can focus on improving our IT, it will remove the major points of friction.”

As he reflects on the business’ first two decades, Mr Hooper says a recent customer net promoter score suggests it is tracking well. The business earned “a nice, strong number. Most companies would be very happy with that.”