Risk Management and Relationships – Oakbridge Solutions for Agribusiness’s Many Challenges

Cannon Warnock, Client Executive in Oakbridge’s Dublin, Georgia, office, specializes in providing risk management and insurance solutions for the Southeast’s crucial agriculture industry. Agriculture is the No. 1 contributor to Georgia’s economy, accounting for $74 billion in economic impact every year, according to the Georgia Department of Economic Development. We recently checked in with Cannon to get a clearer understanding of this important part of Oakbridge’s portfolio advantage.

Oakbridge: It’s great speaking with you today. First question, Cannon, tell us a little bit about the agribusiness industry and how it might not be what people first perceive.

Cannon Warnock: Happy to give a little background. What most people think of as traditional “farming” is actually a highly complex industry that has many interrelated components pulling from a broad range of business sectors. Our focus is on two primary segments: commercial agriculture and the actual growing and harvesting of crops, which is what people traditionally think of as “farming.”

Commercial agriculture is all the related industries outside of the farm itself. So that can be transportation, brokerage facilities, grain storage, crop processing, etc. Farming includes the farmers and the farms themselves. In Georgia, for instance, these are usually large land holdings or leases that have been worked by families for generations.

Oak: How has the industry changed in the last 20 years?

Cannon: On the farming side, we’re seeing a great consolidation of operations in terms of gross acreage per farmer. Technology and its widespread availability have increased efficiency and allow for this land-per-farmer expansion. We’ve seen the same kinds of changes on the commercial agriculture side. Technology drives efficiency and helps eliminate some of the logistical challenges.

Oak: What are the challenges for each segment?

Cannon: The entire business faces the challenge of infrastructure cost increases. That includes equipment repairs, replacement costs, facility upkeep and insurance. Farmers are dealing with increased seed costs as well, driven by patented seed technologies and contractual restrictions from seed providers. For everyone, add to the mix climate change, water sourcing, labor shortages and supply chain disruptions. Those challenges manifest themselves in what we call “input costs,” which are all the costs excluding the actual growing of the crop. An insurance premium is part of that.

Oak: How do you help farmers mitigate input costs?

Cannon: While we can’t control all the input costs, we can control the insurance portion. Our Risk Management platform is designed to help reduce the farmer’s and commercial agribusiness operator’s premium costs by taking a proactive approach to reducing risk. This includes things like inventory management, vehicle safety maintenance, worker safety training, and premise and facility inspections. Take industrial dust, for example. In crop processing, a lot of dust is produced, which is an explosion and fire hazard. We can help the processors reduce the dust output proactively, therefore reducing their premiums. For farmers, equipment inventory and maintenance are essential. We help them track and schedule repairs and replacements so that their operations aren’t interrupted by machinery that doesn’t work. A key part of our approach to risk management is relieving the administrative burden on the operator so that they can focus on moving their product to market. The approach is sometimes uncomfortable for clients, but they quickly see its benefits in reduced premiums.

Oak: How does risk management create savings?

Cannon: Oakbridge has relationships with all the major agriculture carriers in the Southeast. These relationships matter from the time we provide a quote to when our clients file a claim. When we request underwriting, we provide the carrier with documentation that shows the proactive steps we’ve taken with the client to reduce risk. Once it’s time to file a claim, again, we understand the process and thoroughly document the loss so that our clients can be reimbursed as quickly as possible. We’ve established a standard with the carriers that gives us the ability to negotiate lower rates and more quickly process claims. This provides a much safer investment for the carrier. It’s a key differentiator and a much smarter approach.

Oak: And finally, how is Oakbridge’s risk management approach received in the market?

Cannon: Operators are tired of not having control over their costs. Our “bold statement” selling helps them reduce the insurance portion of their operating costs, giving them greater flexibility and putting control back in their hands.