21 Mar 2013

Farmers need catastrophe insurance, says academic

1:43 pm on 21 March 2013

An insurance academic says New Zealand farmers should be able to access private sector insurance for drought and not have to rely on Government handouts when things go bad.

Massey University senior lecturer in finance, Dr Mike Naylor, says farmers should be able to buy catastrophe insurance to protect themselves against drought and other adverse events.

He says farmers in the United States are offered insurance against weather events and the insurance companies are not at risk because they reinsure or offer private investors weather-linked catastrophe bonds.

Dr Naylor said farmers are often unwilling to take anything perceived as a handout and may be more inclined to use insurance.