Why would a horticulture insurer choose Toronto as its business hub?
Why would a horticulture insurer choose Toronto as its business hub? | Insurance Business Canada
Insurance News
Why would a horticulture insurer choose Toronto as its business hub?
Hagelunie is expanding its reach into Canada
Insurance News
By
David Saric
Hagelunie, a Netherlands-based horticulture insurance carrier, has expanded into Canada with a new branch and selected Toronto as its destination.
While the city is known as a premier location for the financial services industry, it is also one of the largest food processing centres in North America.
“There’s a larger agriculture, agtech food community here in the region,” said Daniel Hengeveld, VICE president, investment attraction at Toronto Global, a company that helps foreign businesses branch out and establish a presence in the city’s business landscape.
“When it comes to companies that want to be in that ecosystem, with the greenhouses and providing the right products and supports to those groups, Toronto becomes a natural magnet for them.”
In an interview with Insurance Business, Hengeveld spoke about why the spike in greenhouse production has necessitated more horticulture insurance options.
A changing agriculture industry
As climate change provides increasingly fraught conditions for growers and farmers to conduct business, greenhouses have begun to rise in popularity.
According to TVO Today, the sector has expanded to more than 40 million square feet, or about 26 per cent, between 2016 and 2021, with Southwestern Ontario being second to the Netherlands in terms of greenhouses.
As Hengeveld noted, greenhouses and other infrastructure that have been built within Canada were informed by weather patterns and climate data that are 10 years old — but times are changing.
By entering into the Canadian market, Hagelunie is looking to provide “additional coverage and peace of mind, for the owners or the growers, that their assets are protected from weather related events,” he said.
This is directly related to a need for greater food security for both Canadians and global populations who rely on the country for food exports.
Hengeveld pointed to the ongoing conflicts in Ukraine, where the warring conditions impeded the export of fertilizer to parts of the world where millions are experiencing hunger, as well as crop and food shortages.
When looking at the growth of the agriculture industry in Canada, the need for food security and the amount of production that needs to occur in order to keep national and global citizens fed, there needs to be assurance that no weather event or catastrophe can derail these efforts.
“There needs to be an insurance product that can provide that financial backstop or disaster relief in order for growers to continue producing or rebound quickly in the aftermath of a catastrophe,” Hengeveld said.
“With globalization, everything is so interconnected, the smallest effect here in Canada has a widespread impact in North America or wherever these products are being sold to.”
This is also important to national food security as well.
The current price of beef has skyrocketed due to large herd sizes but diminutive acreage for grazing due to draughts and other weather-related occurrences in Alberta and the prairie provinces.
“While insurance can’t exactly solve this problem on its own,” Hengeveld said.
“It can de-risk the situation by providing avenues of financial relief or other risk mitigation techniques,” such as the case in Saskatchewan, where the province’s Crop Insurance Corporation is offsetting feeding costs as below-average rainfall continues to leave fields and pastures dry.
Through the program, livestock producers can receive financial aid amounting to $80 per head, with the government providing up to $70 million.
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