We strongly recommend that you review your clients sums insured relating to crops and stored produce with particular attention to grain.

You may already be aware from recent press reports that, the price of grain has doubled over the past year. There are a number of reasons for this including:

• Growing of grain for alternative fuels following UK government initiatives and legislation to encourage this.
• Increases in global demand - for example, China was until recently an exporter of grain, it is now a net importer.
• Global shortages - higher than average rainfall in July and August have lead to reduced yields in Western Europe, whilst the main grain producers in the Southern hemisphere (Australia and Argentina) have been plagued by problems of lower than average rainfall again impacting yields.

Whilst this is a marked change in a relatively short period of time, there is a school of thought that suggests this may be part of a longer term trend. Climate change experts are suggesting that severely damaging weather events will become more frequent and that the climate generally will become increasingly unpredictable. The impact of weather events are apparent in this years grain yields and the vulnerability of the agricultural industry to changes in the climate is particularly acute.

All of this has obvious implications for the adequacy of your farming clients' sums insured. BiBU would recommend that you:

• correspond with your clients accordingly to ensure that they are fully aware of the perils of underinsurance and more explicitly the effect that average could have on any insurance claim that they submit.
• ensure that your clients understand how fluctuations in prices can have implications for their insurance coverage.
• review your client's sums insured and recommend that they amend them accordingly so that their sums insured are adequate for insurance purposes.
  

BiBU value our relationship with you and want to avoid claims disputes as much as possible. Moreover, we understand that if a client is paid out in full this helps to ensure the long term profitability and viability of their business. In addition, if the client's experience of the claims process is a good one this can only help to engender improved relationships between you us and most importantly your policyholder.

If you wish to discuss any of the above further please contact Rob Dale at response@bibinsurance.co.uk.