Former Google official launches risk management tool for ag producersOne of the guys who brought the world Google now says he can help farmers better manage risk and protect profits.
By: Jonathan Knutson, Agweek
One of the guys who brought the world Google now says he can help farmers better manage risk and protect profits.
WeatherBill’s new Total Weather Insurance uses technology to customize crop insurance protection for agricultural producers.
“We supplement and complement multi-peril insurance,” going “above and beyond the federal crop insurance program,” says David Friedberg, chief executive officer of San Francisco-based WeatherBill and previously one of the founding members of Google’s corporate development team.
After leaving Google, the widely used Internet search engine, Friedberg launched WeatherBill to make it easier for people in agriculture and other weather-sensitive industries to protect revenue and control costs.
Total Insurance Weather is offered through a broad network of agents, including those with ADM Crop Risk Services and offers protection against rain, drought, heat, cold and snow.
WeatherBill’s products are available nationwide for any crop at any stage of growth, the company says.
The company recommends pricing as early as possible, before weather forecasts have a higher impact on pricing.
Producers can go online to get an estimate of their “insurance gap,” or the difference between their expected revenue for a particular crop and the percentage of that revenue covered by their current insurance.
County, crop assessment
Total Insurance Weather also provides a customized weather risk analysis for individual crops and counties, using information from U.S. Department of Agriculture crop production forecasts, Risk Management Agency loss data and historical weather data to determine weather risks for individual crops in individual counties.
Here’s an example of how it works:
North Dakota’s Cass County is the nation’s leading soybean producer. According to the WeatherBill website, 99 percent of soybean losses in Cass County are a result of weather. Breaking down the losses by specific risk:
- Excess moisture accounts for 60 percent of the losses. “Rainy season protection” is recommended.
- Hail accounts for 20 percent of the losses.
- Frost is responsible for 6 percent of losses. “Fall freeze protection” is recommended.
- Cold, wet weather accounts for 4 percent of losses. “Heat units/freeze protection” is recommended.
Hail protection isn’t available under Total Insurance Weather.
Hail isn’t a serious issue nationwide, nor does it fit well into the Total Insurance Weather business model, Friedberg says.
Unlike traditional crop insurance, WeatherBill automatically sends payment when the weather conditions insured against occurred as measured by independent sources such as the U.S. Weather Service.
Hail damage would need to be observed physically by a WeatherBill representative, so hail protection isn’t offered, Friedberg says.
“Because so much of what we do is automated, our costs are low,” he says.
WeatherBill insurance products all carry an A.B. Best “A” or “excellent” rating, he says.
The A.M. Best Co. provides an independent opinion of the creditworthiness of insurers.
‘Lost profit potential’
TCI Insurance, an independent insurance agency based in West Fargo, N.D., is carrying Total Weather Insurance.
“For us, it’s a product on top of crop insurance,” one unrelated to the federal farm program, says Doug Johnson, president of the company and a specialist in crop insurance
Traditional crop insurance covers only a portion of yield and is based on annual production history, or APH. But the APH often fails to accurately reflect how much a field will yield because of better seed varieties and improving farming practices, Johnson says.
This coverage gap creates “lost profit potential” that Total Weather Insurance can replace, he says.
Area producers “probably rolled their eyes” when TCI Insurance first contacted them about Total Weather Insurance, Johnson says.
But farmers who hear details of the program are impressed, he says.
“Guys really like it,” he says.