“You don’t know sometimes whether, like, are we going to get a rate or are they even going to want to be on it,” said Jeff Whiting (pictured), president and CEO of Ayr Farmers Mutual Insurance Company. That uncertainty – driven by a tight reinsurance market and escalating climate exposures – is now central to the business of farm insurance in Ontario.
While weather events intensify and farms grow in complexity, insurers are being forced to take on larger risks with fewer guarantees of support from reinsurers. “We’ve gone through this period of pretty heavy inflation on buildings,” said Whiting. “One of the things we've been working on is making sure that we're getting the building limits appropriate for what's insured. So getting insurance to value has been a big emphasis for us this year.”
That’s no small task when building codes have lagged behind the evolution of the agricultural sector. “As farms went from mom-and-pop to more like large manufacturing, they were still building under codes that never met those standards,” he said. When a severe winter storm swept Ontario last season, it caused unprecedented damage. “I’ve never seen so many buildings go down as we had go down this past winter,” said Whiting. “We had 60 buildings go down... you might get one every couple of years, not 60 in a few days.”
Many of the damaged barns had been built to outdated standards – some using four-foot truss spans, a method no longer permitted under the new code. “That’s a no-no now under the new code,” said Whiting. “But before, on an agricultural building, that was code.”
While other insurers have responded by scaling back, especially on policies covering tarp-roofed or wind-sensitive structures, Ayr Farmers Mutual has chosen not to withdraw coverage. “We haven’t taken any types of coverages away,” Whiting said. “We’re kind of a people-first organization... we want to make sure people aren’t going into debt heavily in the event of a loss.”
But holding ground on coverage comes at a cost. With fewer reinsurers willing to back large-scale farm risks, primary insurers are bearing more of the load. “Through our reinsurer, Farmers Mutual Re, we’ve got some prearranged agreements,” Whiting said. “But each risk is still on its own merits... it gets to be a little scary.”
Farms themselves are changing – larger, more diversified, and more reliant on technology. Whether it's poultry barns, greenhouses, or dairy operations with on-site retail, the complexity of the exposures is rising fast. “They’re certainly diversifying,” Whiting said. “We recently visited one of our dairy farms... they’ve built their own dairy on site, they sell dairy products, they do tours.”
These ventures open up new liability and property risks, but Whiting said the insurer remains willing to underwrite them if basic safety standards are met. “It can be a great relationship to still partner on these ventures,” he said.
Beyond the buildings and tours, loss of income is a growing concern. In high-output operations, even short disruptions can have massive financial consequences. “If they’re down even a day, it can mean hundreds of thousands of dollars,” said Whiting. “A lightning hit to equipment... they could be down for a few days and lose crop because they can’t control the climate.”
This shift has elevated formerly peripheral coverages – like loss of use, cyber, and equipment breakdown – to near-standard status. “These coverages used to be little add-ons and maybe not often used,” said Whiting. “They’re significantly used today.”
The most difficult challenge may be the lack of reinsurance capacity behind the front-end coverage. Ayr Farmers Mutual insures the primary layer, then looks to reinsurers for support on large risks. But costs are mounting. “Sometimes policyholders are seeing really significant increases because reinsurance has gone up so much in the last three years,” Whiting said. “We’ve had to increase our rates because of this cost... I feel for people. We’re doing the best we can, but sometimes it’s a hard pill to swallow.”
In some cases, farmers could help reduce their exposure by changing how they build. “If they can think about building with separation – more than 80 feet apart – now that’s a separate risk,” Whiting said. “And we don’t have to run into capacity issues.” He added that not enough communication around risk separation has reached the farm community, despite its potential to reduce premiums and improve insurability.
Newer code enforcement and loss prevention strategies may help limit future collapse events, but problems remain. In poultry and swine buildings, metal gussets can corrode from exposure to ammonia gases. “I’ve seen carriers deny claims based on those gussets being rusty,” said Whiting. “Even though the building probably is very stable.”
Adding to the complexity, equipment replacement has become less predictable. With import tariffs and supply chain lags, even common parts aren’t readily available. “There’s getting to be a lack of inventory sitting at some of the dealerships,” Whiting said. “When something does go down, there isn’t often readily something available to replace it now.”
It’s a risk that’s difficult to underwrite, and even harder to explain to clients after a loss. As climate events multiply and farm operations become more capital-intensive, insurance providers are navigating a new reality – one where coverage isn’t just about repairing damage, but sustaining a business that can lose millions in a matter of days.
Whiting knows the stakes are rising, and his team is trying to stay ahead. “You still can’t stop the bad weather event,” he said. “But you can at least improve your luck with these things, much more by doing the loss prevention.”
