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ADVERTORIAL

OLD MUTUAL

FAMILY BUSINESS

How living through a global pandemic should change the way your business does/looks at insurance

Having survived a global pandemic, what now?

 

“You are ugly and your mother dresses you funny.” This used to be one of the ultimate put-downs when I was a young man. During the last few weeks we suddenly all dressed funny (how do you stop your glasses from steaming if you wear a mask or wrap your head in a scarf?). The whole world was an ugly place, especially for businessmen. Even, and maybe especially, for farmers.

Predicting the full effect of the human, economic and geopolitical consequences of this global pandemic is impossible. Adapting to the so-called new normal is the only way to survive. Late last year one of the big agri businesses held a seminar for their farmers. They highlighted the five key issues farmers needed to address if they wanted to continue being successful. These were:

·         Strategy

·         Human Resources

·         Management information

·         Partnerships

·         Finances

We all suffered immediate and considerable operational challenges to which we had to adapt. The question that arises is what the impact will be in the medium and longer term? How will growth prospects and profitability be affected? You may have put in place mitigating policies and practices to ensure continued profitable growth and they will carry you through this turmoil. What you may have forgotten to do is have a serious look at your insurance portfolio and adapted your insurance programme to the “new” business you now run.

Insurance reflects the realities of your business as these are the exposures you need to mitigate and manage. If you have done any of the following and not changed your policy and cover you are probably incorrectly insured:

·         Incorporated automation,digital and innovative technology in your business

·         Adapted or changed your security, both physical and electronic

·         Built any new structures or applied new machinery

·         Changed your mechanization programme

·         Employed or layed off staff

·         Changed your distribution model and channel

·         Made changes to your vehicle fleet

·         Added another income stream (such as a home industry)

·         Closed down an income stream (such as the guest house)

·         Changed your business form (sole proprietor to trust or company)

This is by no means a comprehensive list but will give you an indication of how wide the spectrum of issues can be that influences your insurance needs. Acting quickly is something any businessman needs to do in the face of adversity. You need to develop adequate contingency plans for your business and position your business to deal with these challenges. Importantly you also need to position your business for when the crisis subsides. Especially amidst these turbulent times it is important to emphasize employee morale and ensure they are mentally and physically healthy.

A few years ago when farm workers in the western cape set farm equipment and assets alight amidst labour disputes many farmers were caught unprepared as they never thought of taking SASRIA cover for the property on the farm. They only insured their vehicles against unrest because they never believed it would happen on their own properties. In the present situation you may have found that the horse has already bolted in the same way. Potentially you could have insured some of the challenges that you currently face, but you did not because it would never happen. Nobody is clairvoyant and nobody can predict the future but Covid has clearly illustrated that things can and will change very quickly under the right circumstances.

Your challenges around logistics and the movement of produce, keeping product in the market and retaining your markets are key in your long-term strategy. What is the worst-case scenario you can possibly imagine? Do the same with every part of your business and operations and your personal property and household. Then sit down with your broker and share these scenarios and challenge your broker to find solutions. The truth is that he may not find solutions for all the scenarios you sketched, but the exercise will be worth both your whiles. You then have choices that you can evaluate for their cost effectiveness and value proposition. You may be surprised at the available solutions and how they can also assist in improving your own management processes and occupational and health practices.

 You have survived a global pandemic, so what now? Well, for starters you and your broker may be dressed funny, wearing masks and sitting suitably far apart at that point. Just do not let the discussion turn ugly!

Andries Wiese Head Agri Hollard. South Africa.


ADVERTORIAL

OLD MUTUAL

CORONA VIRUS

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